OMEGA PROTEIN CORP
S-1/A, 1998-03-10
FISHING, HUNTING AND TRAPPING
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<PAGE>

   
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 10, 1998
    
 
                                                      REGISTRATION NO. 333-44967
________________________________________________________________________________
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
   
                                AMENDMENT NO. 1
                                       TO
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
    
                            ------------------------
 
                           OMEGA PROTEIN CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                         <C>                                         <C>
                  NEVADA                                       0912                                   APPLIED FOR
       (STATE OR OTHER JURISDICTION                (PRIMARY STANDARD INDUSTRIAL                     (I.R.S. EMPLOYER
    OF INCORPORATION OR ORGANIZATION)              CLASSIFICATION CODE NUMBER)                     IDENTIFICATION NO.)
</TABLE>
 
                        1717 ST. JAMES PLACE, SUITE 550
                              HOUSTON, TEXAS 77056
                                 (713) 940-6100
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)
 
                            ------------------------
 
                          JOSEPH L. VON ROSENBERG III
                     CHIEF EXECUTIVE OFFICER AND PRESIDENT
                           OMEGA PROTEIN CORPORATION
                        1717 ST. JAMES PLACE, SUITE 550
                              HOUSTON, TEXAS 77056
                                 (713) 940-6100
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)
 
                            ------------------------
 
                                   COPIES TO:
 
           GORDON E. FORTH, ESQ.                           NEIL GOLD, ESQ.
WOODS, OVIATT, GILMAN, STURMAN & CLARKE LLP          FULBRIGHT & JAWORSKI L.L.P.
             44 EXCHANGE STREET                           666 FIFTH AVENUE
         ROCHESTER, NEW YORK 14614                    NEW YORK, NEW YORK 10103
 
                            ------------------------
 
     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the Registration Statement becomes
effective.
 
     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
 
     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement for the same offering. [ ]
 
     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
 
     If delivery of a prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]
                            ------------------------
 
   
    
 
     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
 
________________________________________________________________________________


<PAGE>
<PAGE>

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALES OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
 
   
                  SUBJECT TO COMPLETION -- DATED MARCH 10, 1998
    
 
PROSPECTUS
- --------------------------------------------------------------------------------
 
                                6,000,000 Shares
                                     [Logo]
 
                                  Common Stock
- --------------------------------------------------------------------------------
 
Of the 6,000,000 shares of common stock, par value $.01 per share (the 'Common
Stock'), offered hereby, 4,000,000 shares are being sold by Omega Protein
Corporation (the 'Company'), which, prior to this offering (the 'Offering'), was
a wholly-owned subsidiary of Zapata Corporation ('Zapata' or the 'Selling
Stockholder') and 2,000,000 shares are being offered by the Selling Stockholder.
The Company will not receive any proceeds from the sale of shares of Common
Stock being sold by the Selling Stockholder. See 'Principal and Selling
Stockholders.'
 
   
Prior to the Offering, there has been no public market for the Common Stock. It
is currently anticipated that the initial public offering price will be between
$14 and $16 per share. See 'Underwriting' for a discussion of the factors to be
considered in determining the initial public offering price. Application has
been made to list the Common Stock on the New York Stock Exchange ('NYSE') under
the symbol 'OME.'
    
 
Zapata will own 74.7% of the Common Stock outstanding after the Offering (71.6%
if the Underwriters' over-allotment options are exercised in full) and, as a
result, will have the ability to control the outcome of all matters submitted to
a vote of the Company's stockholders, including the election of directors. See
'Principal and Selling Stockholders.'
 
   
SEE 'RISK FACTORS' ON PAGES 6 TO 10 FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
    
- --------------------------------------------------------------------------------
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES  COMMISSION NOR HAS THE
    SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
      PASSED  UPON  THE ACCURACY  OR ADEQUACY  OF THIS  PROSPECTUS. ANY
           REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
<TABLE>
<CAPTION>
                                                     Underwriting                                   Proceeds to
                                Price to             Discounts and           Proceeds to              Selling
                                 Public             Commissions(1)           Company(2)           Stockholder(2)
<S>                       <C>                    <C>                    <C>                    <C>
Per Share...............            $                      $                      $                      $
Total(3)................            $                      $                      $                      $
</TABLE>
 
(1) The Company and the Selling Stockholder have agreed to indemnify the several
    Underwriters against certain liabilities, including liabilities under the
    Securities Act of 1933, as amended. See 'Underwriting.'
 
   
(2) Before deducting expenses payable by the Company, estimated to be $534,000,
    and expenses payable by the Selling Stockholder, estimated to be $266,000.
    
 
(3) The Company and the Selling Stockholder have granted the Underwriters 30-day
    over-allotment options to purchase, in the aggregate, up to 900,000
    additional shares of Common Stock on the same terms and conditions as set
    forth above. If all such additional shares are purchased by the
    Underwriters, the total Price to Public will be $         , the total
    Underwriting Discounts and Commissions will be $           , the total
    Proceeds to Company will be $            and the total Proceeds to Selling
    Stockholder will be $            . See 'Underwriting.'
- --------------------------------------------------------------------------------
 
The shares of Common Stock are offered by the several Underwriters subject to
delivery by the Company and the Selling Stockholder and acceptance by the
Underwriters, to prior sale and to withdrawal, cancellation or modification of
the offer without notice. Delivery of the shares to the Underwriters will be
made through the facilities of the Depository Trust Company, New York, New York
on or about                , 1998.
 
PRUDENTIAL SECURITIES INCORPORATED                      DEUTSCHE MORGAN GRENFELL
 
   
March   , 1998
    


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                                   [PHOTO]
                    Menhaden, the Company's raw material.



                                   [PHOTO]
                      One of the Company's 66 steamers.


                                    [MAP]
                     Location of the Companys operations.





CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING
PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES OF THE
COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE 'UNDERWRITING.'


<PAGE>
<PAGE>

                               PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus and information under 'Risk Factors.' All
references to the Common Stock in this Prospectus reflect the 19,676-for-one
stock split effected January 26, 1998. Unless otherwise indicated, (i) all
information in this Prospectus assumes that the Underwriters' over-allotment
options will not be exercised, (ii) all references in this Prospectus to the
'Company' mean Omega Protein Corporation and its consolidated subsidiaries,
(iii) all references to a 'Fiscal' year refer to the 12 month period ended
September 30 of such year and (iv) all references to tons with respect to fish
catch, fish meal and fish solubles are to short tons and all references to tons
with respect to oil are to metric tons.
 
                                  THE COMPANY
 
     Omega Protein Corporation is the largest U.S. producer of protein-rich meal
and oil derived from marine sources. The Company markets a variety of products
derived from menhaden, a fish found in commercial quantities in coastal waters
off the U.S. mid-Atlantic and Gulf coasts. These products include regular grade
and value-added specialty fish meals, crude and refined fish oils and fish
solubles. The Company's fish meal products are used as protein additives by
animal feed manufacturers and by commercial livestock and poultry farmers. Fish
meal derived from menhaden generally possesses a higher protein content and a
superior amino acid profile than other fish meal produced in the U.S. The
Company's fish oil is used in hydrogenated form by European commercial food
processors in margarine and other shortenings. Due to its content of
nutritionally important omega-3 fatty acids, the oil is also used in Europe in
non-hydrogenated form as a nutritional supplement in foods such as bread, soup
and beverages. In its crude form, the Company's fish oil is used in aquaculture
feeds and certain industrial applications. Fish solubles are sold as protein
additives for animal feed and as organic fertilizers.
 
   
     The Company is the largest U.S. harvester and processor of menhaden. The
menhaden catch is processed in one of the Company's five plants (one of which
was recently acquired) located in Virginia, Mississippi and Louisiana. The
Company's processing operations are vertically integrated and include 66 fishing
vessels and 44 spotter aircraft. In Fiscal 1997, the Company processed
approximately 507,358 tons of menhaden (representing approximately 54% of the
total menhaden harvested in the U.S.) into approximately 124,985 tons of fish
meal, 71,562 tons of fish oil and 16,531 tons of fish solubles. During Fiscal
1997, the Company produced approximately 43% of all fish meal and approximately
58% of all fish oil produced in the U.S. See 'Business -- Product Lines' and
' -- Harvesting and Processing.'
    
 
   
     In Fiscal 1997, the Company reported revenues of $117.6 million and
operating income of $18.2 million. Between Fiscal 1993 and Fiscal 1997 operating
income increased at a compound annual growth rate of 43%. On a pro forma basis
adjusted for the sale of the Company's milling business as of October 1, 1996,
the Company had revenues of $85.6 million and operating income of $18.0 million
in Fiscal 1997. During the first quarter of Fiscal 1998, the Company had
revenues of $29.5 million and operating income of $9.1 million. See 'Pro Forma
Unaudited Consolidated Statement of Operations Data' and 'Management's
Discussion and Analysis of Financial Condition and Results of Operations.' In
early Fiscal 1998, the Company acquired certain operating assets of American
Protein, Inc. and Gulf Protein, Inc., two of the four other remaining menhaden
harvesters. The Company anticipates that these acquisitions will enhance its
harvesting and processing capabilities. See 'Company History and Recent
Transactions.'
    
 
     The feeding practices utilized by certain livestock farmers have become
increasingly complex, requiring specific combinations of proteins, amino acids
and fats to be fed to animals so as to maximize the feed to weight gain ratio
and minimize the overall cost to raise an animal from birth to production. For
example, the Company's fish meal is sold to, among others, (i) dairy feed
manufacturers seeking to increase milk production per cow; (ii) turkey feed and
swine feed manufacturers seeking to improve feed efficiency, increase weight
gain and shorten time to market; and (iii) pet food manufacturers and
aquaculture farmers seeking consistency of texture and taste for their feed. A
growing portion of the Company's meal production is dedicated to higher priced
specialty meals marketed under its Company-
 
                                       3
 

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<PAGE>

   
owned brands, Sea-Lac and Special Select. These specialty meals are designed for
specific animal feed applications, are more easily digestible and allow for
greater protein absorption than most other competing protein feed additives. See
'Business -- Industry Overview.'
    
 
   
     In June 1997, the Food and Drug Administration (the 'FDA') approved the use
of refined (non-hydrogenated) menhaden oil for human consumption in the U.S.
Menhaden oil is the only non-hydrogenated fish oil approved by the FDA for human
consumption. Menhaden oil contains omega-3 fatty acids, which studies have
linked to the prevention and treatment of certain diseases, including
hypertension, cardiovascular disease, cancer and arthritis. The Company believes
that this recent development presents significant domestic market opportunities
for its menhaden oil.
    
 
   
     The Company's strategy is to continue to enhance its position as the
leading domestic supplier of value-added marine protein products (such as
Special Select and Sea-Lac) and oil products, to become the leading domestic
supplier of omega-3 rich oil for human consumption and to broaden its
international presence. To achieve these objectives, the Company has established
the following strategies: (i) focus on the development of value-added products;
(ii) exploit the U.S. market for omega-3 fatty acids; (iii) maintain its status
as the largest U.S. source of marine-derived protein products and oils; and (iv)
expand its presence in the protein additives industry through future acquisition
of other producers of animal-derived protein products in the U.S. and abroad.
See 'Business -- Business Strategy.'
    
 
   
     The Company is a wholly-owned subsidiary of Zapata and is the successor by
merger to the businesses previously conducted by Marine Genetics Corporation
(formerly known as Zapata Protein, Inc.) and its subsidiaries. See 'Company
History and Recent Transactions.' The Company was formed under the laws of the
State of Nevada on January 23, 1998. Its executive offices are located at 1717
St. James Place, Suite 550, Houston, Texas 77056, and its telephone number is
(713) 940-6100.
    
 
                                  THE OFFERING
 
   
<TABLE>
<S>                                                                    <C>
Common Stock Offered by the Company..................................  4,000,000 shares
Common Stock Offered by the Selling Stockholder......................  2,000,000 shares
Common Stock to be Outstanding after the Offering....................  23,676,000 shares (1)
Use of Proceeds by the Company.......................................  To repay indebtedness to Zapata and to a
                                                                       bank and for general corporate purposes,
                                                                       including working capital and
                                                                       acquisitions. See 'Use of Proceeds.'
Proposed NYSE Symbol.................................................  OME
</TABLE>
    
 
- ------------
(1) Excludes options to purchase an aggregate of 4,220,000 shares of Common
    Stock authorized under the Company's 1998 Long-Term Incentive Plan (the
    '1998 Incentive Plan') and the Company's Non-Management Directors Plan
    ('Directors Option Plan'), of which options to purchase 1,657,360 shares of
    Common Stock have been granted at $12.75 per share under the 1998 Incentive
    Plan and options to purchase 582,400 shares of Common Stock have been
    granted at $12.75 per share under the Directors Option Plan. See
    'Management -- Stock Option Plans.'
 
                                  RISK FACTORS
 
   
     Investors should consider the risk factors involved in connection with an
investment in the Common Stock and the impact to investors from various events
that could adversely affect the Company's business, including, among others, the
Company's dependence on menhaden as its single natural resource, the effect on
the prices for the Company's products caused by worldwide supply and demand
relationships for competing products, government regulations, restrictions on
foreign ownership required for the Company to maintain its fishing licenses in
U.S. jurisdictional waters, risk associated with the Company's attempts to
exploit the domestic market for omega-3 fatty acids, fluctuation of quarterly
results, and control of the Company by Zapata after the Offering. For a more
complete discussion of these and other risk factors affecting the Company and
its business, see 'Risk Factors.'
    
   
                            ------------------------
     Special Select'tm' and Sea-Lac'r' are trademarks of the Company.
    
 
                                       4
 

<PAGE>
<PAGE>

   
                      SUMMARY CONSOLIDATED FINANCIAL DATA
          (IN THOUSANDS, EXCEPT PER SHARE AND SELECTED OPERATING DATA)
    
 
   
<TABLE>
<CAPTION>
                                                      YEAR ENDED SEPTEMBER 30,
                                --------------------------------------------------------------------     THREE MONTHS ENDED
                                                                                     1997                   DECEMBER 31,
                                                                          --------------------------   ----------------------
                                1993(1)   1994(2)      1995     1996(1)     ACTUAL      PRO FORMA(3)     1996         1997
                                -------   --------   --------   -------   -----------   ------------   ---------    ---------
                                                                                                            (UNAUDITED)
<S>                             <C>       <C>        <C>        <C>       <C>           <C>            <C>          <C>
STATEMENT OF OPERATIONS DATA:
  Revenues..................... $58,565   $ 96,614   $ 94,959  $93,609      $117,564       $85,599      $25,623(4)   $29,503
  Gross Profit.................  8,100      (2,142)     9,837   15,194        23,818        23,644        4,817       10,229
  Operating income (loss)......  4,295      (6,896)     5,904   10,504        18,205        18,031        3,792        9,075
  Interest expense.............   (818)       (687)    (1,102)    (995)         (592)         (527)        (202)        (379)
  Other (expense) income.......   (148)        114        116     (118)       (1,328)         (791)          (1)         (13)
  Income (loss) before income
    taxes......................  3,329      (7,469)     4,918    9,391        16,285        16,713        3,589        8,683
  Net income (loss)............ $2,147    $ (5,220)  $  3,250   $5,928     $  10,425      $ 10,703      $ 2,225      $ 5,312
  Net income (loss) per share
    (basic)....................  $0.11      $(0.27)     $0.17    $0.30         $0.53         $0.54        $0.11        $0.27
  Average common shares
    outstanding................ 19,676      19,676     19,676   19,676        19,676        19,676       19,676       19,676
 
  Net income (loss) per share
    (diluted)..................  $0.11      $(0.27)     $0.17    $0.30         $0.53         $0.54        $0.11        $0.27
  Average common shares and
    common share equivalents
    outstanding................ 19,676      19,676     19,676   19,676        19,676        19,676       19,676       19,676
SELECTED OPERATING DATA:
  Fish catch (tons)(5)......... 500,088    685,377    512,517   458,917      507,358                     70,082      107,535
  Sales (tons)
    Fish meal:
      Regular grade meal....... 77,896     133,515    108,435   61,494        51,995                      8,483       10,429
      Special Select........... 27,558      30,568     37,084   38,964        47,217                     11,018       14,053
      Sea-Lac..................  5,127       7,576      7,790    9,379        13,917                      3,147        3,501
    Oil:
      Refined..................  5,392       7,249      8,447    8,814         9,747                      2,665        1,923
      Crude.................... 36,659      76,302     79,644   52,257        44,007                     12,300       22,329
    Solubles...................  7,656      15,842     16,879   19,988        18,733                      4,479        3,929
  Average selling price per
    ton:
    Fish meal:
      Regular grade meal....... $  350    $    329   $    329   $  383     $     457                    $   436      $   470
      Special Select...........    445         403        405      495           547                        542          589
      Sea-Lac..................    397         367        370      431           509                        501          528
    Oil:
      Refined.................. $  470    $    423   $    448   $  510     $     529                    $   502      $   552
      Crude....................    320         300        321      390           424                        410          539
    Solubles...................    173         162        157      163           191                        173          209
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                                                              DECEMBER 31, 1997
                                                                                          --------------------------
                                                                                           ACTUAL     AS ADJUSTED(6)
                                                                                          --------    --------------
                                                                                                 (UNAUDITED)
<S>                                                                                       <C>         <C>
BALANCE SHEET DATA:
    Working capital....................................................................   $ 36,898       $ 62,460
    Total assets.......................................................................    130,620        150,581
    Total debt.........................................................................     40,938         10,758
    Stockholders' equity...............................................................     69,666        124,966
</TABLE>
    
 
- ------------
 
   
(1) In August 1993, the Company acquired a 60% equity interest in Venture
    Milling Company, which was involved in the milling of animal feeds and
    protein ingredients for the poultry, hog and dairy industries. In March
    1996, the Company acquired the remaining 40% of Venture Milling Company's
    equity.
    
 
   
    
 
   
(2) Includes a non-recurring charge of $12.3 million related to a write-down of
    the Company's assets to estimated fair value which was computed in
    connection with the Company's contemplated sale in Fiscal 1994.
    
 
   
    
 
   
(3) Gives effect to the September 16, 1997 sale by Venture Milling Company of
    substantially all of its assets as if such sale occurred on October 1, 1996.
    See 'Company History and Recent Transactions' and 'Pro Forma Unaudited
    Consolidated Statement of Operations Data.'
    
 
   
    
 
   
(4) Includes $7.0 million of revenues from the operations of Venture Milling
    Company.
    
 
   
    
 
   
(5) Fish catch has been converted to short tons using the conversion ratio
    recognized for the menhaden species by the U.S. Department of Commerce
    National Oceanic and Atmospheric Administration, National Marine Fisheries
    Service ('NMFS'). NMFS uses a conversion of 670 pounds per 1,000 fish.
    Pounds are converted into short tons by dividing the total pounds of fish
    catch by 2,000 (the 'NMFS fish catch conversion ratio').
    
 
 
   
    
   
(6) Gives effect to the sale by the Company of 4,000,000 shares of Common Stock
    at at an assumed initial public offering price of $15.00 per share, the
    midpoint of the filing range (after deducting underwriting discounts and
    commissions and estimated offering expenses payable by the Company), and the
    application of the estimated net proceeds therefrom as described in 'Use of
    Proceeds.'
    
 
                                       5


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<PAGE>

                                  RISK FACTORS
 
     An investment in the Common Stock involves a high degree of risk.
Prospective investors should consider carefully the following risk factors, in
addition to the other information presented in this Prospectus, in connection
with an investment in shares of Common Stock offered hereby.
 
   
     When used in this Prospectus, the words 'may,' 'will,' 'expect,'
'anticipate,' 'continue,' 'estimate,' 'project,' 'intend' and similar
expressions are intended to identify forward-looking statements regarding among
other things: (i) trends affecting the Company's financial condition or results
of operations; (ii) the Company's business and growth strategies; (iii) the use
of the net proceeds to the Company from the Offering; (iv) trends in the animal
feed, protein additives, refined and crude oil and organic fertilizer
industries; (v) government regulations; and (vi) the Company's financing plans.
Prospective investors are cautioned that any forward-looking statements are not
assurances or guarantees of future performance and are subject to risks and
uncertainties and that actual results may differ materially from those included
within the forward-looking statements as a result of various factors. Factors
that could cause or contribute to such differences include, but are not limited
to, those described below, and under the heading 'Management's Discussion and
Analysis of Financial Condition and Results of Operation' and elsewhere in this
Prospectus.
    
 
     DEPENDENCE ON SINGLE NATURAL RESOURCE. The Company's primary raw material
is menhaden. The Company's business is dependent on its annual menhaden harvest
in ocean waters along the U.S. mid-Atlantic and Gulf coasts. The Company's
annual menhaden harvest is subject to fluctuation due to natural conditions such
as varying fish population, adverse weather conditions and disease. The Company
has no control over these conditions and accordingly, there can be no assurance
that the Company will be able to meet its annual raw material requirements in
any year. A failure to harvest menhaden in sufficient numbers and in a timely
manner would have a material adverse effect on the Company's business, results
of operations and financial condition.
 
   
     COMPETITION AND PRICE. The marine protein and oil business is subject to
significant competition from vegetable and animal protein and oil products, such
as soybean meal and oil, palm oil, spray dried blood meal, bone meal and feather
meal. The price for fish meal generally bears a relationship to prevailing
soybean meal prices, while prices for fish oil used as a replacement for
vegetable fats and oils usually bear a relationship to prices for these
alternative fats and oils. In addition, to a lesser extent, the Company competes
with international marine protein and oil producers located principally in
Scandinavia and South America. The prices for the Company's products are
significantly influenced by worldwide supply and demand relationships over which
the Company has no control and which tend to fluctuate to a significant extent
over the course of a year and from year to year. During the past three years,
worldwide prices for protein additives and oils have steadily increased,
reaching historic highs during Fiscal 1997 and the first quarter of Fiscal 1998.
There can be no assurance that the favorable pricing environment of the last
three years will continue. See 'Business -- Competition.'
    
 
   
     GOVERNMENT REGULATIONS. Certain states have enacted legislation and
regulations that prohibit, limit or restrict menhaden fishing within their
jurisdictional waters. In addition, certain states regulate the length of the
fishing season. Violations of these laws and regulations can result in
substantial penalties, ranging from fines to seizure of catch and vessels. The
Company's operations are also subject to federal, state and local laws and
regulations relating to the protection of the environment and the health and
safety of its employees. Failure by the Company to continue to comply with
applicable laws and regulations could have a material adverse effect on the
Company's business, results of operations and financial condition. In addition,
there can be no assurance that new laws and regulations, or stricter
interpretations of existing laws or regulations, will not materially adversely
affect the Company's business or results of operations in the future. See
'Business -- Harvesting and Processing' and '--Regulation.'
    
 
   
     RESTRICTION ON FOREIGN OWNERSHIP. Certain federal regulations related to
the Company's harvesting activities restrict the total percentage of the
Company's capital stock which may be held by non-U.S. citizens to less than 50%
of the Company's outstanding capital stock and voting stock. The Company has
established procedures that must be followed in the purchase, sale or other
transfer of the Company's common stock. The Company's failure at any time to
maintain the U.S. citizenship ownership requirements would result in the loss of
the Company's ability to harvest menhaden in U.S. jurisdictional waters. Such a
loss would have a material adverse effect on the Company's business,
    
 
                                       6
 

<PAGE>
<PAGE>

results of operations and financial condition. See 'Business -- Regulation' and
'Description of Capital Stock -- Foreign Ownership Restrictions.'
 
     RISKS ASSOCIATED WITH NEW BUSINESS VENTURES. In June 1997, the FDA approved
the sale of refined (non-hydrogenated) menhaden oil for use in edible products
in the U.S. The Company intends to sell refined (non-hydrogenated) menhaden oil
to food processors who will incorporate it into their products for human
consumption in the U.S. and, therefore, it is subject to risks inherent with a
new business venture such as the unproven market for this product and the need
to train its sales and marketing staff. There can be no assurance that the
Company will be able to profitably sell menhaden oil in the U.S. for human
consumption or that it will not incur losses in attempting to do so.
 
     RISKS ASSOCIATED WITH ACQUISITION STRATEGY. A significant element in the
Company's growth strategy is the acquisition of additional businesses to expand
the geographic and product markets in which it competes. The Company recently
acquired certain assets from two competitors. See 'Company History and Recent
Transactions.' There can be no assurance that the Company will be successful in
integrating these assets into its operations or be able to sell profitably the
increased production it anticipates from utilization of these assets. There also
can be no assurance that the Company will be able to identify or reach mutually
agreeable terms with acquisition candidates and their owners, that the Company
will be able to profitably manage future businesses it acquires or successfully
integrate future businesses it acquires into the Company without substantial
costs, delays or other problems. In addition, acquisitions may involve a number
of special risks, including adverse short-term effects on the Company's reported
operating results; diversion of management's attention; dependence on retention,
hiring and training of key personnel; and unanticipated problems or legal
liabilities. Some or all of these risks could have a material adverse effect on
the Company's business, results of operations and financial condition. There can
also be no assurance that any debt or equity financing needed for future
acquisitions can be obtained or that, if obtained, such financing will be on
terms that are favorable to the Company or sufficient for the Company's needs.
If the Company is unable to obtain sufficient financing, it may be unable to
fully implement its acquisition strategy.
 
     FLUCTUATION OF QUARTERLY RESULTS. The Company's menhaden harvesting and
processing business is seasonal. The Company generally has higher sales during
the harvesting season (which includes the third and fourth quarters of each
Fiscal year) due to increased availability, but prices during the harvesting
season tend to be lower than during the off-season. As a result, the Company's
quarterly operating results have fluctuated in the past and may fluctuate in the
future. Fluctuations caused by variations in quarterly operating results may
affect the market price of the Common Stock. In addition, from time to time the
Company defers sales of inventory based on worldwide prices for competing
products which may affect comparable period comparisons. See 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Quarterly Results.'
 
   
     DEPENDENCE ON KEY PERSONNEL. The Company's performance is substantially
dependent on the efforts of its executive officers and certain key employees.
The Company intends to enter into employment agreements with its key executive
officers prior to the consummation of this Offering, but does not carry
insurance on the life of any of its executive officers. The loss of the services
of the Company's key officers could have a material adverse effect on the
Company's business, financial condition and results of operations. See
'Management.'
    
 
     DEPENDENCE ON LABOR FORCE. The Company's operations are labor intensive.
The Company's menhaden harvesting operations depend in large part upon its
ability to attract, motivate and retain vessel captains and crew members. From
time to time, the Company has experienced shortages of qualified personnel for
these positions. There can be no assurance that the Company will be able to
attract and retain sufficient numbers of vessel captains and crew members to
operate efficiently or that the Company's labor expense will not increase as a
result of labor shortages or increased labor expense in this area. Such labor
shortages or increased labor expenses could materially adversely affect the
Company's business, results of operations and financial condition.
 
   
     RISKS RELATED TO INTERNATIONAL SALES AND EXPANSION. Approximately 25.1% of
the Company's pro forma Fiscal 1997 revenues were derived from sales of its
products to customers outside of the U.S., principally in Europe and Canada.
Presently all of the Company's sales are denominated in U.S. dollars. An element
of the Company's strategy is to pursue growth opportunities in international
markets,
    
 
                                       7
 

<PAGE>
<PAGE>

including acquisitions in South America and sales to Asia and Mexico. These
activities are or will be exposed to the risk of changes in social, political
and economic conditions inherent in foreign operations and international trade,
including changes in the law and policies that govern foreign investment and
international trade in such countries, as well as, to a lesser extent, changes
in U.S. laws and regulations relating to foreign investment and trade. Changes
of tax or other laws, partial or total expropriation, currency exchange rate
fluctuations and restrictions on currency repatriation, the disruption of labor,
political disturbances, insurrection or war and the effect of requirements of
partial local ownership of operations in certain countries could have a material
adverse effect on the Company's business, results of operations or financial
conditions.
 
     CONTROL BY ZAPATA. Upon completion of the Offering, Zapata will own
approximately 74.7% (approximately 71.6% if the Underwriters' over-allotment
options are exercised in full) of the shares of Common Stock outstanding.
Accordingly, Zapata will have the ability to elect all the members of the Board
of Directors of the Company (the 'Company's Board') and otherwise control the
management and affairs of the Company. Malcolm Glazer, through the Glazer Family
Limited Partnership, is the beneficial owner of approximately 45% of Zapata's
issued and outstanding voting common stock. Malcolm Glazer and his son, Avram
Glazer, are members of the Company's Board. The ability of Zapata and through
Zapata, the Glazers, to control the Company could have a material adverse effect
on the market price for shares of Common Stock. See 'Principal and Selling
Stockholders' and 'Shares Eligible For Future Sale.'
 
     CONFLICTS OF INTEREST. In the future, conflicts of interest may arise
between Zapata and the Company in a number of areas relating to their past and
present relationships in which Zapata and the Glazers could exercise their
control to determine the outcome. Potential conflicts include future
acquisitions of businesses or properties, other business opportunities, the
election of new or additional directors, the payment of dividends, incurring
indebtedness, tax matters, financial commitments, registration rights and
issuance of capital stock of the Company. Any officer or director of Zapata who
serves as a director of the Company, such as Malcolm Glazer and Avram Glazer,
may have conflicts of interest in addressing business opportunities and
strategies as to which Zapata's and the Company's interest differ. There can be
no assurance that any such conflict of interest will be resolved in favor of the
Company.
 
   
     The Company and Zapata intend to enter into certain agreements prior to the
consummation of the Offering. The agreements, which become effective on the
completion of the Offering, define the relationship between the Company and
Zapata generally with respect to indemnification and contribution for any losses
arising out of this Offering as a result of securities law violations,
restrictions on Zapata harvesting menhaden or engaging in the fish meal and oil
business following the closing of this Offering, corporate services, taxes, real
estate, and registration rights. As a result of Zapata's ownership interest in
the Company, the terms of such agreements were not the result of arm's-length
negotiations. Reimbursement for ongoing services provided by the Company to
Zapata will be at the Company's estimated cost. There can be no assurance that
such agreements, or the transactions provided for therein, will be effected on
terms at least as favorable to the Company as could have been obtained from
unaffiliated third parties. See 'Management -- Board Committees' and 'Certain
Transactions and Arrangements Between the Company and Zapata.'
    
 
   
     LIABILITIES AS A MEMBER OF CONSOLIDATED TAX GROUP. The Company has been and
will continue to be through the closing of the Offering, a member of Zapata's
consolidated tax group under federal income tax law. Following the consummation
of this Offering, the Company will no longer be a member of Zapata's
consolidated tax group for federal income tax purposes. Each member of a
consolidated group for federal income tax purposes is jointly and severally
liable for the federal income tax liability of each other member of the
consolidated group. Similar rules may apply under state income tax laws.
Although Zapata and the Company intend to enter into a Tax Indemnity Agreement
prior to the consummation of the Offering, if Zapata or members of its
consolidated tax group (other than the Company and its subsidiaries) fail to pay
certain tax liabilities arising prior to the time that the Company is no longer
a member of Zapata's consolidated tax group or during the tax period including
such date, the Company could be required to make payments in respect of these
tax liabilities and such payments could materially adversely affect the
Company's business, results of operations and financial
    
 
                                       8
 

<PAGE>
<PAGE>

   
condition. See 'Certain Transactions and Arrangements Between the Company and
Zapata -- Tax Indemnity Agreement.'
    
 
     POTENTIAL LEGAL LIABILITY. The Company is subject to the Jones Act which
permits seamen and their personal representatives and certain close family
members to recover damages if the seaman has been injured due to the negligence
of the Company or to the negligence of the seaman's fellow employees. Damages
are allowed for compensation of past and future loss of income, expenses of
medical care, pain and suffering and disability. The Company participates in an
insurance program that provides coverage for liability of the Company under the
Jones Act up to certain limits. There can be no assurance, however, that the
Company's insurance will be adequate to cover all potential claims under the
Jones Act. See 'Business -- Insurance.'
 
     PROVISIONS WITH ANTITAKEOVER EFFECT. Certain provisions of the Company's
Articles of Incorporation and By-Laws, as well as the Nevada Corporation Law
could delay or frustrate the removal of incumbent directors and could make
difficult a merger, tender offer or proxy contest involving the Company, even if
such events could be viewed as beneficial by the Company's stockholders. The
Company's Board is empowered to issue preferred stock in one or more series
without stockholder action. Any issuance of this 'blank-check' preferred stock
could materially limit the rights of holders of the Common Stock and render more
difficult or discourage an attempt to obtain control of the Company by means of
a tender offer, merger, proxy contest or otherwise. In addition, the Articles of
Incorporation and By-Laws contain a number of provisions which could impede a
takeover or change in control of the Company, including, among other things,
staggered terms for members of the Company's Board, the requiring of two-thirds
vote of stockholders to amend certain provisions of the Articles of
Incorporation or the inability to take any action by written consent after
Zapata no longer owns a majority of the Company's Common Stock. Certain
provisions of the Nevada Corporation Law to which the Company may become subject
at some time in the future could also discourage takeover attempts that have not
been approved by the Company's Board. See 'Description of Capital
Stock -- Antitakeover Effects of Certain Provisions of the Articles of
Incorporation and By-Laws.'
 
     SHARES ELIGIBLE FOR FUTURE SALE. Upon completion of the Offering, the
Company will have 23,676,000 shares of Common Stock outstanding (24,276,000 if
the Underwriters' over-allotment options are exercised in full). Of these
shares, the 6,000,000 shares offered hereby (6,900,000 shares if the
Underwriters' over-allotment options are exercised in full) will be freely
tradeable without restriction or requirement of future registration under the
Securities Act of 1933, as amended (the 'Securities Act'). All of the remaining
shares of Common Stock will continue to be held by Zapata and are 'restricted
securities' as that term is defined by Rule 144 promulgated under the Securities
Act. Such shares will be eligible for sale beginning upon expiration of the
lock-up agreement described below, subject to the manner of sale, volume, notice
and information requirements of Rule 144. The Company, its officers and
directors and the Selling Stockholder have agreed that they will not, for a
period of 180 days (360 days in the case of the Selling Stockholder) from the
date of this Prospectus, directly or indirectly, offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of any option to purchase or other sale or disposition) of any shares of
Common Stock or other capital stock of the Company or any securities convertible
into, or exercisable or exchangeable for, any Common Stock, or other capital
stock of the Company without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, except that such agreement does not
prevent the Company from granting additional options under the Company's 1998
Incentive Plan or the Directors Option Plan. Prudential Securities Incorporated
may, in its sole discretion, at any time and without notice, release all or any
portion of the securities subject to such lock-up agreements.
 
   
     The Company has options outstanding to purchase 2,239,760 shares of Common
Stock, all of which shall vest ratably over a three year period following the
grant date of January 26, 1998. Within 365 days after the date of this
Prospectus, the Company intends to file a Registration Statement on Form S-8
covering such shares of Common Stock (including the shares subject to
outstanding options that have been reserved for issuance under its stock option
plans) thus permitting the resale of such shares in the public market without
restriction under the Securities Act (provided they are not held by affiliates).
Further, the Company has granted certain registration rights to Zapata with
respect to shares of
    
 
                                       9
 

<PAGE>
<PAGE>

   
Common Stock it will retain after the Offering that will effectively allow
Zapata to sell all of its shares of Common Stock approximately one year after
the Offering and to participate as a selling stockholder, subject to certain
limitations, in future public offerings of Common Stock by the Company. Although
no prediction can be made as to the effect, if any, that future sales of shares
or the availability of shares for sale will have on the market price for Common
Stock prevailing from time to time. Sale of substantial amounts of Common Stock
in the public market, or the perception of the availability of shares for sale,
could adversely affect the prevailing market price of the Common Stock and could
impair the Company's ability to raise capital through the sale of its equity
securities. See 'Description of Capital Stock,' 'Shares Eligible for Future
Sale' and 'Certain Transactions and Arrangements between the Company and
Zapata -- Registration Rights Agreement.'
    
 
   
     IMMEDIATE AND SUBSTANTIAL DILUTION. Purchasers of shares of Common Stock in
the Offering will experience an immediate and substantial dilution in the net
tangible book value of each share of Common Stock of $9.99 per share based upon
an assumed initial public offering price of $15.00, the mid-point of the filing
range. See 'Dilution.'
    
 
   
     DIVIDEND POLICY. The Company currently intends to retain earnings, if any,
to support its growth strategy and does not anticipate paying dividends on its
Common Stock in the foreseeable future. Payment of dividends on Common Stock
will be subject to restrictions contained in the Company's credit facilities.
    
 
     NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE. Prior to the
Offering, there has been no public market for the Common Stock, and there can be
no assurance that an active trading market for the Common Stock will develop or
be sustained upon completion of the Offering. The initial public offering price
will be determined by negotiations among the Company, the Selling Stockholder
and the representatives of the Underwriters based upon a number of factors,
including market valuations of other companies engaged in activities similar to
those of the Company, estimates of the business potential and prospects of the
Company, the present state of the Company's business operations, the Company's
management and other factors deemed relevant. The initial public offering price
may not be indicative of the market price of the Common Stock following
completion of the Offering. The trading price of the Common Stock could also be
subject to significant fluctuations in response to variations in quarterly
results of operations, changes in worldwide prices for protein additives or
vegetable oils, general trends in the animal feed, protein ingredients, edible
oil, and organic fertilizer industries, changes in government legislation and
regulation, overall market conditions or other factors. In addition, the stock
markets historically have experienced extreme price and volume fluctuations
which may affect the market price of the Common Stock in a manner unrelated or
disproportionate to the operating performance of the Company. These market
fluctuations may adversely affect the market price of the Common Stock. See
'Underwriting.'
 
                                       10
 

<PAGE>
<PAGE>

                    COMPANY HISTORY AND RECENT TRANSACTIONS
 
HISTORY
 
   
     The Company is the successor by merger to Marine Genetics Corporation
(formerly known as Zapata Protein, Inc.), a Delaware corporation, which was
formed in March 1994 to act as the holding company for Omega Protein, Inc.
(formerly known as Zapata Protein (USA), Inc.), Omega Protein, Inc., which is
the operating entity for the Company's current businesses, was formed in
Virginia in October 1986, and is the successor to businesses conducted since
1913. The Company has a number of direct and indirect subsidiaries.
    
 
     The Company and its predecessors have been a wholly-owned subsidiary of
Zapata, a publicly traded company which has shares listed on the New York Stock
Exchange, Inc. ('NYSE'), since 1973 when Zapata acquired the Company's
operations. In Fiscal 1997, Zapata contributed as capital to the Company $41.9
million of intercompany indebtedness owed to Zapata by the Company. Prior to the
consummation of the Offering, the Company and Zapata intend to enter into a
Separation Agreement, Tax Indemnity Agreement, Registration Rights Agreement,
Administrative Services Agreement and Sublease Agreement for the purpose of
defining their continuing relationship. See 'Risk Factors -- Conflicts of
Interest' and 'Certain Transactions and Arrangements between the Company and
Zapata.'
 
RECENT TRANSACTIONS
 
     To concentrate on and enhance its core business, the Company recently sold
a marginally profitable business and acquired certain assets to increase the
Company's harvesting and production capabilities.
 
   
     On September 16, 1997, the Company's wholly-owned subsidiary, Venture
Milling Company, a Delaware corporation ('Venture Milling'), sold substantially
all of its assets to an unrelated third party (the 'Venture Milling
Disposition'). Venture Milling was primarily in the business of blending
different animal protein products (i.e., fish meal, blood meal and feather meal)
for sale to producers of feed for broilers and other animals with low
nutritional requirements. Venture Milling had annual revenues and operating
income (loss) of $32.0 million and $174,000, respectively, in Fiscal 1997, $17.5
million and ($122,000), respectively, in Fiscal 1996 and $8.1 million and
($115,000), respectively, in Fiscal 1995. The Venture Milling Disposition
resulted in a $531,000 pre-tax loss to the Company in Fiscal 1997 and did not
have a material impact on the Company's balance sheet since Venture Milling
leased most of the assets employed in its operations.
    
 
   
     On November 3, 1997, the Company acquired for $14.5 million in cash, the
fishing and processing assets of American Protein, Inc. ('American Protein'),
which operated 10 steamers and a menhaden processing plant in the Chesapeake Bay
area (the 'American Protein Acquisition'). American Protein's facilities were
located in close proximity to the Company's Reedville, Virginia facility.
Shortly after closing this acquisition, the Company closed the American Protein
plant and began integrating its assets into the Company's existing operations.
    
 
   
     On November 25, 1997, the Company purchased the fishing and processing
assets of Gulf Protein, Inc. ('Gulf Protein'), which included six steamers, five
spotter planes and the processing equipment at the Gulf Protein plant located
near Morgan City, Louisiana, for $13.6 million in cash and the assumption of
$883,000 in long-term liabilities (the 'Gulf Protein Acquisition' and, together
with the American Protein Acquisition, the 'Recent Acquisitions'). In connection
with the Gulf Protein Acquisition, the Company also entered into a five year
lease for the Gulf Protein plant at a $220,000 annual rental rate. The Company
is currently upgrading this plant's processing capabilities so that it can
manufacture specialty meals. The Company intends to begin operations at the
Morgan City, Louisiana plant at the start of the 1998 fishing season.
    
 
   
     The Company financed the cash portion of the purchase price for the Recent
Acquisitions through loans from Zapata in the aggregate principal amount of
$28.1 million. These loans will be repaid with a portion of the proceeds of the
Offering.
    
 
                                       11
 

<PAGE>
<PAGE>

                                USE OF PROCEEDS
 
   
     The net proceeds to the Company from the sale of the 4,000,000 shares of
Common Stock offered by the Company hereby (after deducting underwriting
discounts and commissions and estimated Offering expenses payable by the
Company) are estimated to be approximately $55.3 million ($63.6 million if the
Underwriters' over-allotment options are exercised in full), assuming an initial
public offering price of $15.00 per share, the mid-point of the filing range.
    
 
   
     The Company intends to use approximately: (i) $33.3 million to repay the
Company's indebtedness to Zapata outstanding as of December 31, 1997 and (ii)
$2.1 million to repay bank indebtedness outstanding as of December 31, 1997. Of
the $33.3 million of intercompany indebtedness to be repaid to Zapata, $28.1
million was incurred to fund the cash portion of the purchase price for the
Recent Acquisitions and the balance was primarily incurred to pay the Company's
federal income taxes. The Zapata intercompany indebtedness incurred in
connection with the Recent Acquisitions bears interest at 8.5% per annum and
matures in November 2002. The balance of the intercompany indebtedness does not
bear interest. The $2.1 million of bank indebtedness was incurred to fund
working capital needs, bears interest at the bank's prime rate or LIBOR plus 175
basis points, at the Company's election, and matures in August 2002. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources.' The balance of the net proceeds
will be used for general corporate purposes, including working capital and
future acquisitions. Although the Company is currently evaluating various
acquisition opportunities, the Company has no current or pending plans,
agreements, understandings, negotiations or arrangements with respect to any
material acquisition.
    
 
     Pending application of the net proceeds to the Company from the Offering,
the Company intends to invest such net proceeds in interest-bearing, short-term,
investment grade securities or guaranteed obligations of the U.S. government.
 
     The Company will not receive any proceeds from the sale of shares of Common
Stock by the Selling Stockholder.
 
                                DIVIDEND POLICY
 
     Prior to October 1, 1990, the Company from time to time declared and paid
cash dividends to Zapata as its only stockholder. Since October 1, 1990, the
Company has not declared or paid any dividends with respect to its Common Stock.
The Company currently anticipates that all future retained earnings will be
retained by the Company to support its growth strategy. Accordingly, the Company
does not anticipate paying cash dividends for the foreseeable future. The
payment of any cash dividends will be in the discretion of the Company's Board
and will depend upon the Company's results of operations, financial condition,
cash requirements, future prospects, contractual restrictions contained in the
Company's credit facilities and other factors deemed relevant by the Company's
Board. See 'Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources.'
 
                                       12
 

<PAGE>
<PAGE>

                                 CAPITALIZATION
 
   
     The following table sets forth the Company's short-term debt and
capitalization at December 31, 1997 and on an as adjusted basis to give effect
to the sale by the Company of 4,000,000 shares of Common Stock at an assumed
initial public offering price of $15.00 per share, the mid-point of the filing
range (after the deduction of underwriting discounts and commissions and
estimated offering expenses payable by the Company) and the application of the
estimated net proceeds therefrom as described in 'Use of Proceeds.' The table
set forth below should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations and the historical
consolidated financial statements of the Company appearing elsewhere in this
Prospectus.
    
 
   
<TABLE>
<CAPTION>
                                                                                              DECEMBER 31, 1997
                                                                                           -----------------------
                                                                                            ACTUAL     AS ADJUSTED
                                                                                           --------    -----------
                                                                                               (IN THOUSANDS)
<S>                                                                                        <C>         <C>
Amounts due parent -- current...........................................................   $  8,798     $   3,639
Current portion of long-term debt.......................................................      1,540         1,098
                                                                                           --------    -----------
          Total short-term debt.........................................................   $ 10,338     $   4,737
                                                                                           --------    -----------
                                                                                           --------    -----------
Long-term debt:
     Bank...............................................................................   $ 11,282     $   9,660
     Parent.............................................................................     28,116        --
                                                                                           --------    -----------
          Total long-term debt..........................................................   $ 39,398     $   9,660
Stockholders' equity:
     Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued.........      --           --
     Common stock, $.01 par value; 80,000,000 shares authorized; 19,676,000 shares
      issued and outstanding; 23,676,000 shares issued and outstanding as adjusted(1)...        197           237
     Capital in excess of par value.....................................................     43,731        98,991
     Reinvested earnings from October 1, 1990(2)........................................     25,738        25,738
                                                                                           --------    -----------
          Total stockholders' equity....................................................     69,666       124,966
                                                                                           --------    -----------
               Total capitalization.....................................................   $109,064     $ 134,626
                                                                                           --------    -----------
                                                                                           --------    -----------
</TABLE>
    
 
- ------------
 
(1) Excludes options to purchase an aggregate of 4,220,000 shares of Common
    Stock authorized under the 1998 Incentive Plan and the Directors Option
    Plan, of which options to purchase 1,657,360 shares of Common Stock have
    been granted at $12.75 per share under the 1998 Incentive Plan and options
    to purchase 582,400 shares of Common Stock have been granted at $12.75 per
    share under the Directors Option Plan. See 'Management -- Stock Option
    Plans.'
 
(2) See Note 1 to Consolidated Financial Statements.
 
                                       13
 

<PAGE>
<PAGE>

                                    DILUTION
 
   
     Purchasers of the Common Stock offered hereby will experience an immediate
and substantial dilution in the book value of the Common Stock from the initial
public offering price. At December 31, 1997 the net tangible book value of the
Company was $63.4 million or $3.22 per share. After giving effect to the sale by
the Company of the 4,000,000 shares of Common Stock in the Offering (at an
assumed initial public offering price of $15.00 per share, the mid-point of the
filing range, and after deducting underwriting discounts and commissions and
estimated Offering expenses to be paid by the Company), the Company's net
tangible book value will be $118.7 million or $5.01 per share. This represents
an immediate increase in net tangible book value of $1.79 per share of Common
Stock to the existing stockholder and an immediate and substantial dilution
of $9.99 per share of Common Stock to new investors purchasing shares of
Common Stock in the Offering. The following table illustrates the dilution
per share:
    
 
   
<TABLE>
<S>                                                                                      <C>      <C>
Assumed initial public offering price.........................................................    $15.00
     Net tangible book value before the Offering......................................   $3.22
 
     Increase attributable to new investors...........................................   $1.79
                                                                                         -----
Net tangible book value after the Offering....................................................    $ 5.01
                                                                                                  ------
Dilution to new investors.....................................................................    $ 9.99
                                                                                                  ------
                                                                                                  ------
</TABLE>
    
 
                                       14


<PAGE>
<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA
 
   
     The following table presents, for the periods and the dates indicated,
selected historical consolidated financial data of the Company. The information
presented under the caption 'Statement of Operations Data' for Fiscal 1995, 1996
and 1997 and 'Balance Sheet Data' as of September 30, 1996 and 1997 is derived
from, and is qualified by reference to, the Company's audited consolidated
financial statements included elsewhere in this Prospectus. The selected
financial data for the Company presented under the captions 'Statement of
Operations Data' for Fiscal 1993 and 1994 and 'Balance Sheet Data' at September
30, 1993, 1994 and 1995 are derived from the Company's audited consolidated
financial statements not included in this Prospectus. The financial information
set forth below as of December 31, 1997 and for the three month periods ended
December 31, 1996 and 1997, is derived from the Company's unaudited consolidated
financial statements, which, in the opinion of management include all
adjustments necessary for a fair presentation of the financial condition and
results of operations of the Company for such periods. The results of operations
for interim periods are not necessarily indicative of a full year's operations.
    
   
     The historical financial data may not be indicative of the Company's future
performance and does not necessarily reflect what the financial position and
results of operations of the Company would have been had the Company operated
independently of Zapata during the periods covered. The pro forma financial data
presented below does not purport to represent what the financial performance of
the Company actually would have been had the related transaction occurred on the
date referred to below or to project the Company's financial performance or
position for any future date. The information set forth below should be read in
conjunction with 'Pro Forma Unaudited Consolidated Statement of Operations
Data,' 'Management's Discussion and Analysis of Financial Condition and Results
of Operations' and the historical consolidated financial statements and notes
thereto included elsewhere in this Prospectus.
    
 
   
<TABLE>
<CAPTION>
                                                     YEAR ENDED SEPTEMBER 30,
                               --------------------------------------------------------------------     THREE MONTHS ENDED
                                                                                    1997                   DECEMBER 31,
                                                                         --------------------------   ----------------------
                               1993(1)   1994(2)      1995     1996(1)     ACTUAL      PRO FORMA(3)     1996         1997
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)                        (UNAUDITED)
<S>                            <C>       <C>        <C>        <C>       <C>           <C>            <C>          <C>
STATEMENTS OF OPERATIONS DATA:
    Revenues.................. $58,565   $ 96,614   $ 94,959   $93,609    $ 117,564      $ 85,599      $25,623(4)   $29,503
    Costs of sales............ 50,465      98,756     85,122   78,415        93,746        61,955       20,806       19,274
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
        Gross profit (loss)...  8,100      (2,142)     9,837   15,194        23,818        23,644        4,817       10,229
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
    Selling, general and
      administrative..........  3,805       4,754      3,933    4,690         5,613         5,613        1,025        1,154
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
    Operating income (loss)...  4,295      (6,896)     5,904   10,504        18,205        18,031        3,792        9,075
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
    Interest expense..........   (818)       (687)    (1,102)    (995)         (592)         (527)        (202)        (379)
    Other (expense) income....   (148)        114        116     (118)       (1,328)         (791)          (1)         (13)
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
    Income (loss) before
      income taxes............  3,329      (7,469)     4,918    9,391        16,285        16,713        3,589        8,683
    (Provision) benefit for
      income taxes............ (1,182)      2,249     (1,668)  (3,463)       (5,860)       (6,010)      (1,364)      (3,371)
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
    Net income (loss)......... $2,147    $ (5,220)  $  3,250   $5,928     $  10,425      $ 10,703      $ 2,225      $ 5,312
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
                               -------   --------   --------   -------   -----------   ------------   ---------    ---------
    Net income (loss) per
      share (basic)...........  $0.11    $(0.27)     $0.17      $0.30       $0.53         $0.54         $0.11        $0.27
    Average common shares
      outstanding............. 19,676      19,676     19,676   19,676        19,676        19,676       19,676       19,676
    Net income (loss) per
      share (diluted).........  $0.11     $(0.27)    $0.17      $0.30       $0.53         $0.54         $0.11        $0.27
    Average common shares and
      common share equivalents
      outstanding............. 19,676      19,676     19,676   19,676        19,676        19,676       19,676       19,676
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                    SEPTEMBER 30,                         DECEMBER 31,
                                 ----------------------------------------------------     ------------
                                  1993       1994       1995       1996        1997           1997
                                 -------    -------    -------    -------    --------     ------------
                                                    (IN THOUSANDS)                        (UNAUDITED)
<S>                              <C>        <C>        <C>        <C>        <C>          <C>
BALANCE SHEET DATA:
    Working capital...........   $30,559    $27,472    $16,398    $20,719    $ 31,396       $ 36,898
    Total assets..............    96,038     89,533     85,012     86,969     100,440        130,620
    Total debt................    69,127     62,898     61,255     50,674      12,328         40,938
    Stockholders' equity(5)...     8,071      2,851      6,101     12,029      64,354         69,666
</TABLE>
    
 
- ------------
 
   
(1) In August 1993, the Company acquired a 60% equity interest in Venture
    Milling Company, which was involved in the milling of animal feeds and
    protein ingredients for the poultry, hog and dairy industries. In March
    1996, the Company acquired the remaining 40% of Venture Milling Company's
    equity.
    
 
   
    
 
   
(2) Includes a non-recurring charge of $12.3 million related to a write-down of
    the Company's assets to estimated fair value which was computed in
    connection with the Company's contemplated sale in Fiscal 1994.
    
 
   
    
 
   
(3) Gives effect to the September 16, 1997 sale by Venture Milling Company of
    substantially all of its assets as if such sale occurred on October 1, 1996.
    See 'Company History and Recent Transactions' and 'Pro Forma Unaudited
    Consolidated Statement of Operations Data.'
    
 
   
(4) Includes $7.0 million of revenues from the operations of Venture Milling.
    
 
   
    
   
    
   
(5) In Fiscal 1997, Zapata contributed to the Company as capital $41.9 million
    of existing intercompany debt owed to Zapata by the Company.
    
 
                                       15
 

<PAGE>
<PAGE>

         PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS DATA
 
     The following unaudited pro forma consolidated statement of operations data
gives effect to the Venture Milling Disposition which occurred on September 16,
1997 as if such transaction was effected as of October 1, 1996. See 'Company
History and Recent Transactions.'
 
     The unaudited pro forma consolidated financial data set forth below may not
be indicative of the results that actually would have been achieved by the
Company if the Venture Milling Disposition had been consummated at the beginning
of the period presented, nor does it purport to present results of operations of
the Company for future periods.
 
   
<TABLE>
<CAPTION>
                                                                              YEAR ENDED SEPTEMBER 30, 1997
                                                                          -------------------------------------
                                                                                        VENTURE
                                                                                        MILLING
                                                                           ACTUAL       RESULTS       PRO FORMA
                                                                          --------      --------      ---------
                                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                                       <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
     Revenues........................................................     $117,564      $ 31,965       $85,599
     Cost of sales...................................................       93,746        31,791        61,955
                                                                          --------      --------      ---------
          Gross profit...............................................       23,818           174        23,644
     Selling, general and administrative.............................        5,613         --            5,613
                                                                          --------      --------      ---------
     Operating income................................................       18,205           174        18,031
     Interest expense................................................         (592)          (65)         (527)
     Other expense, net..............................................       (1,328)         (537)         (791)
                                                                          --------      --------      ---------
     Income (loss) before income taxes...............................       16,285          (428)       16,713
     (Provision) benefit for income taxes............................       (5,860)          150        (6,010)
                                                                          --------      --------      ---------
     Net income (loss)...............................................     $ 10,425      ($   278)      $10,703
                                                                          --------      --------      ---------
                                                                          --------      --------      ---------
     Net income (loss) per share (basic).............................      $0.53        ($0.01)         $0.54
     Average common shares outstanding...............................       19,676        19,676        19,676
 
     Net income (loss) per share (diluted)...........................      $0.53        ($0.01)         $0.54
     Average common shares and common share equivalents
       outstanding...................................................       19,676        19,676        19,676
</TABLE>
    
 
   
    
 
                                       16


<PAGE>
<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
OVERVIEW
 
   
     The Company owns 66 steamers (51 of which are directly involved in the
harvesting operations) and owns 33 and leases 11 aircraft (of which 41 are
directly involved in the harvesting operations) that are used to harvest
menhaden in ocean waters along the U.S. mid-Atlantic and Gulf coasts. The fish
catch is processed into regular grade fish meal, specialty fish meals, fish oils
and fish solubles at the Company's five plants (one of which was recently
acquired) located in Virginia, Mississippi and Louisiana.
    
 
   
     The following table summarizes the Company's harvesting and production for
the indicated periods:
    
 
   
<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED
                                                  YEAR ENDED SEPTEMBER 30,            DECEMBER 31,
                                               -------------------------------     -------------------
                                                1995        1996        1997        1996        1997
                                               -------     -------     -------     -------    --------
<S>                                            <C>         <C>         <C>         <C>        <C>
Fish catch (tons)(1).......................    512,517     458,917     507,358      70,082     107,535
Production (tons):
     Fish meal
          Regular grade....................     82,097      56,569      63,835       9,056       8,192
          Special Select...................     38,920      46,325      46,409       3,583      13,106
          Sea-Lac..........................      8,346      10,631      14,741       4,108       4,908
     Oil
          Crude............................     64,870      60,257      61,905       6,407      10,492
          Refined..........................      8,745       8,834       9,657       2,630       2,115
     Solubles..............................     21,108      17,139      16,531       3,221       4,474
                                               -------     -------     -------     -------    --------
               Total production............    224,086     199,755     213,078      29,005      43,287
                                               -------     -------     -------     -------    --------
                                               -------     -------     -------     -------    --------
</TABLE>
    
 
- ------------
 
(1) Fish catch has been converted to tons using the NMFS fish catch conversion
    ratio.
 
     The Company's harvesting season generally extends from May through December
in the mid-Atlantic coast and from April through October in the Gulf coast.
During the off season, the Company fills purchase orders from the inventory it
has accumulated during the fishing season. Prices for the Company's products
tend to be lower during the fishing season when product is more abundant than in
the off season. Throughout the entire year, prices are significantly influenced
by supply and demand in world markets for competing products, particularly
soybean meal for its fish meal products and vegetable oils and fats for its fish
oil products when used as an alternative to vegetable oils and fats. In an
effort to reduce price volatility and to generate higher, more consistent profit
margins, the Company has concentrated on the production and marketing of
specialty meal products, which generally have higher margins than the Company's
regular grade meal.
 
   
     During Fiscal 1997, the Company sold approximately 35.0% of its regular
grade fish meal on a forward basis at fixed prices and the balance of its fish
meal and other products substantially in the spot markets. The Company
recognizes revenues when title to its products is transferred to the customer.
The Company's annual revenues are highly dependent on both annual fish catch and
inventories carried over from the previous Fiscal year. The Company determines
the level of inventory to be carried over based on prevailing market prices for
the products and anticipated customer usage and demand during the off season.
Thus, production volume does not necessarily correlate with sales volume in the
same Fiscal year.
    
 
                                       17
 

<PAGE>
<PAGE>

   
     The following table sets forth the Company's revenues by product, and the
approximate percentage of total revenues represented thereby, for the indicated
periods:
    
 
   
<TABLE>
<CAPTION>
                                        YEAR ENDED SEPTEMBER 30,                             THREE MONTHS ENDED DECEMBER 31,
               ---------------------------------------------------------------------------  ----------------------------------
                                                                    1997
                     1995              1996        ---------------------------------------        1996              1997
               ----------------  ----------------                     PRO FORMA  PRO FORMA  ----------------  ----------------
               REVENUES PERCENT  REVENUES PERCENT  REVENUES PERCENT  REVENUES(1)  PERCENT   REVENUES PERCENT  REVENUES PERCENT
               -------- -------  -------- -------  -------- -------  ----------- ---------  -------- -------  -------- -------
 
 <S>           <C>      <C>      <C>      <C>      <C>      <C>      <C>         <C>        <C>      <C>      <C>      <C>
 Regular
   Grade......   $35.7    37.6%    $23.6    25.2%   $ 23.7    20.2%      $23.7      27.7%     $ 3.7    14.5%    $ 4.9    16.6%
 Special
   Select.....    15.0    15.8      19.3    20.6      25.8    21.9        25.8      30.1        6.0    23.4       8.3    28.2
 Sea-Lac......     2.9     3.1       4.0     4.3       7.1     6.0         7.1       8.3        1.6     6.3       1.8     6.1
 Crude Oil....    25.6    26.9      20.4    21.8      18.6    15.8        18.6      21.7        5.0    19.5      12.0    40.7
 Refined
   Oil........     3.8     4.0       4.5     4.8       5.2     4.4         5.2       6.1        1.3     5.1       1.1     3.7
 Fish
   Solubles...     2.6     2.7       3.2     3.4       3.6     3.1         3.6       4.2        0.8     3.1       0.8     2.7
 Venture
   Milling....     8.1     8.5      17.5    18.7      32.0    27.2      --         --           7.0    27.3      --       --
 Nets and
   Other......     1.3     1.4       1.1     1.2       1.6     1.4         1.6       1.9        0.2     0.8       0.6     2.0
               -------- -------  -------- -------  -------- -------      -----   ---------  -------- -------  -------- -------
     Total....   $95.0   100.0%    $93.6   100.0%   $117.6   100.0%      $85.6     100.0%     $25.6   100.0%    $29.5   100.0%
               -------- -------  -------- -------  -------- -------      -----   ---------  -------- -------  -------- -------
               -------- -------  -------- -------  -------- -------      -----   ---------  -------- -------  -------- -------
</TABLE>
    
 
- ------------
 
(1) The pro forma figures give effect to the Venture Milling Disposition as if
    such sale had occurred on October 1, 1996.
 
   
     Approximately 40% of the Company's cost of sales vary in direct proportion
to fish catch. For example, steamer crews and spotter pilots are paid according
to the size of the fish catch; fuel required for fish processing also varies
with the size of the catch. On a pro forma basis, the Company had variable costs
of $24.8 million in Fiscal 1997. In the three month period ended December 31,
1997 ('First Quarter Fiscal 1998'), the Company had $7.7 million of variable
costs. Approximately 60% of the Company's cost of sales are fixed and remain
relatively constant regardless of production or harvest volume. Fixed costs
include depreciation and amortization, rent, insurance and taxes. On a pro forma
basis, the Company had fixed costs of approximately $37.2 million in Fiscal
1997. In First Quarter Fiscal 1998, the Company had $11.6 million of fixed
costs.
    
 
   
     The Company allocates production costs on the basis of total fish catch and
total costs associated with each fishing season. The fish meal and oil inventory
is calculated on a standard cost basis each month and adjusted to an actual cost
basis quarterly. The cost incurred during the off-season period from January
through April for regular maintenance of fishing vessels and plants are deferred
to the next fishing season (May through December) and allocated to production as
the fish catch is processed. The off-season deferred cost was approximately $2.2
million, $2.5 million and $2.4 million at September 30, 1995, 1996 and 1997,
respectively, and $5.3 million at December 31, 1997.
    
 
   
     The Company depreciates its fixed assets on a straight-line basis over the
useful life of the respective asset. The Company's depreciation expense was $2.6
million, $3.2 million and $3.7 million for Fiscal 1995, 1996 and 1997,
respectively, and $1.4 million for First Quarter Fiscal 1998. The Company
expects depreciation expense to increase to approximately $6.0 million in Fiscal
1998 due to the assets acquired in the Recent Acquisitions, the substantial
completion of its Moss Point, Mississippi dry dock and vessel construction
facility and the completion during Fiscal 1997 and 1998 of certain capital
improvement projects.
    
 
     The Company's selling, general and administrative expenses primarily
consist of employee wages and benefits paid to sales personnel and
administrative employees, rent, utilities and fees paid to outside service
providers such as lawyers, accountants and research and development consultants.
 
   
     The Company's effective tax rate varies from year-to-year due to
variability in state income taxes payable and offsetting deductions.
    
 
                                       18
 

<PAGE>
<PAGE>

RESULTS OF OPERATIONS
 
   
     The following table sets forth as a percentage of revenues, certain items
of the Company's operations for each of the indicated periods:
    
 
   
<TABLE>
<CAPTION>
                                                                                                   THREE MONTHS
                                                          YEAR ENDED SEPTEMBER 30,                    ENDED
                                                 ------------------------------------------        DECEMBER 31,
                                                                                  PRO FORMA      ----------------
                                                 1995       1996       1997        1997(1)       1996       1997
                                                 -----      -----      -----      ---------      -----      -----
<S>                                              <C>        <C>        <C>        <C>            <C>        <C>
Revenues......................................   100.0%     100.0%     100.0%       100.0%       100.0%     100.0%
Cost of sales.................................    89.6       83.8       79.7         72.4         81.2       65.3
                                                 -----      -----      -----      ---------      -----      -----
  Gross profit................................    10.4       16.2       20.3         27.6         18.8       34.7
Selling, general and administrative...........     4.1        5.0        4.8          6.6          4.0        3.9
                                                 -----      -----      -----      ---------      -----      -----
Operating income..............................     6.2       11.2       15.5         21.1         14.8       30.8
Interest expense..............................    (1.2)      (1.1)      (0.5)        (0.6)        (0.8)      (1.3)
Other (expense) income........................     0.1       (0.1)      (1.1)        (0.9)        --         --
                                                 -----      -----      -----      ---------      -----      -----
Income before income taxes....................     5.2       10.0       13.9         19.5         14.0       29.5
(Provision) for income taxes..................    (1.8)      (3.7)      (5.0)        (7.0)        (5.3)     (11.4)
                                                 -----      -----      -----      ---------      -----      -----
Net income....................................     3.4        6.3        8.9         12.5          8.7       18.1
                                                 -----      -----      -----      ---------      -----      -----
                                                 -----      -----      -----      ---------      -----      -----
</TABLE>
    
 
- ------------
 
   
(1) Gives effect to the Venture Milling Disposition as of October 1, 1996.
    
 
   
FIRST QUARTER FISCAL 1998 COMPARED TO FIRST QUARTER FISCAL 1997
    
 
   
     Revenues. Revenues increased $3.9 million or 15.1% in First Quarter Fiscal
1998 from $25.6 million in the three months ended December 31, 1996 ('First
Quarter Fiscal 1997') to $29.5 million. This growth resulted primarily from a
23.9% increase in the tons of specialty grade fish meal and a 62.1% increase in
the tons of oil sold compared to First Quarter Fiscal 1997 coupled with an
overall increase in the average selling price of all of the Company's products.
Sales of oil increased due to the Company's decision to defer fish oil produced
in Fiscal 1997 to First Quarter Fiscal 1998 in anticipation of higher prices.
Adjusted for the Venture Milling Disposition, revenues for First Quarter Fiscal
1997 would have been $18.6 million
    
 
   
     Gross profit. Gross profit increased $5.4 million, or 112.4% from $4.8
million in First Quarter Fiscal 1997 to $10.2 million in First Quarter Fiscal
1998. As a percentage of revenues, the Company's gross profit increased from
18.8% in First Quarter Fiscal 1997 to 34.7% in First Quarter Fiscal 1998. The
improvement in gross margin was the result of increasing sales of the Company's
higher margin specialty brand products, an overall increase in sales prices for
all of the Company's products and the elimination of lower gross margin sales
resulting from the Venture Milling Disposition.
    
 
   
     Selling, general and administrative expenses. Selling, general and
administrative expenses increased 12.6% from $1.0 million in First Quarter
Fiscal 1997 to $1.2 million in First Quarter Fiscal 1998 due to increased
personnel costs. As a percentage of revenues, selling, general and
administrative expenses were approximately 4% in both periods.
    
 
   
     Operating income. As a result of the factors discussed above, the Company's
operating income for First Quarter Fiscal 1998 increased to $9.1 million from
$3.8 million for the corresponding quarter in the prior Fiscal year. As a
percentage of revenues, operating income increased from 14.8% in First Quarter
Fiscal 1997 to 30.8% in First Quarter Fiscal 1998.
    
 
   
     Interest expense. Interest expense increased from $202,000 in First Quarter
Fiscal 1997 to $379,000 in First Quarter Fiscal 1998. This increase resulted
primarily from the increase in interest expense relating to the acquisition loan
made to the Company by Zapata.
    
 
   
     Other (expense) income. Other (expense) income remained relatively constant
for both First Quarter Fiscal 1997 and First Quarter Fiscal 1998.
    
 
   
     Income taxes. The Company recorded a $3.4 million provision for income tax
for First Quarter Fiscal 1998 for a 38.8% effective tax rate in comparison to a
$1.4 million provision, representing a
    
 
                                       19
 

<PAGE>
<PAGE>

   
38.0% effective tax rate for the prior year period. The effective tax rates
approximate the applicable combined state and federal statutory tax rates for
the respective periods.
    
 
FISCAL 1997 COMPARED TO FISCAL 1996
 
     Revenues. Fiscal 1997 revenues increased $24.0 million, or 25.6% from $93.6
million in Fiscal 1996 to $117.6 million in Fiscal 1997. Of this increase, $14.5
million was attributable to increased sales by Venture Milling. The balance of
the increase was attributable to a 26.5% increase in the tons of specialty grade
fish meal sold and an overall increase in the average selling price of the
Company's products. These increases were offset by a 12.0% decline in the tons
of fish oil shipped in Fiscal 1997 compared to Fiscal 1996 due to the Company's
decision to defer fish oil sales produced in Fiscal 1997 to the following Fiscal
year in anticipation of higher prices, coupled with the Company's lower level of
oil inventory carried over from the previous Fiscal year. Excluding Venture
Milling revenues, the Company had revenues of $76.1 million in Fiscal 1996 and
$85.6 million in Fiscal 1997.
 
     Gross profit. Gross profit increased $8.6 million, or 56.8%, from $15.2
million in Fiscal 1996 to $23.8 million in Fiscal 1997. As a percentage of
revenues, the Company's gross profit increased from 16.2% in Fiscal 1996 to
20.3% in Fiscal 1997. This increased percentage was primarily the result of
increasing sales of the Company's higher margin specialty brand products. On a
pro forma basis, the Company had gross profit and a gross profit margin of $23.6
million and 27.6%, respectively, in Fiscal 1997.
 
     Selling, general and administrative expenses. Selling, general and
administrative expenses increased $923,000, or 19.7% from $4.7 million in Fiscal
1996 to $5.6 million in Fiscal 1997. As a percentage of revenues, selling,
general and administrative expenses were approximately 5.0% in each of Fiscal
1996 and Fiscal 1997. The dollar increase was primarily due to a one-time
contract payment to the Company's former Chief Executive Officer who retired
during Fiscal 1997 and to severance expenses incurred in connection with the
reduction of the Company's administrative staff during Fiscal 1997. On a pro
forma basis, selling, general and administrative expenses were 6.6% of revenues
in Fiscal 1997.
 
     Operating income. As a result of the factors discussed above, the Company's
operating income increased to $18.2 million in Fiscal 1997 from $10.5 million in
Fiscal 1996. As a percentage of revenues, operating income increased from 11.2%
in Fiscal 1996 to 15.5% in Fiscal 1997. On a pro forma basis, operating income
was $18.0 million or 21.1% as a percentage of revenues.
 
   
     Interest expense. Interest expense declined $403,000 or 40.5% from $995,000
in Fiscal 1996 to $592,000 in Fiscal 1997. This decline resulted from the
Company's reduction in its average outstanding borrowings during Fiscal 1997
compared to the 1996 Fiscal year.
    
 
   
     Other (expense) income. Other (expense) income increased to ($1.3 million)
in Fiscal 1997 from ($118,000) in Fiscal 1996. Other expense increased primarily
due to losses in joint ventures and the sale of Venture Milling's assets.
    
 
   
     Income taxes. The Company recorded a $5.9 million provision for income tax
for Fiscal 1997 for a 36.0% effective tax rate in comparison to a $3.5 million
provision, representing a 36.8% effective tax rate for Fiscal 1996. The
effective tax rates approximate the applicable combined state and federal
statutory tax rates for the respective periods.
    
 
FISCAL 1996 COMPARED TO FISCAL 1995
 
   
     Revenues. Fiscal 1996 revenues decreased $1.4 million, or 1.5% from $95.0
million in Fiscal 1995 to $93.6 million in Fiscal 1996. Revenues excluding
Venture Milling decreased $10.8 million in Fiscal 1996. This decrease occurred
as a result of a 43.3% decrease in the tons of regular grade fish meal sold and
a 34.4% decrease in the tons of crude oil sold due primarily to a lower fish
catch. The decline in the tons sold was offset in part by an increase in the
average selling price across all of the Company's product lines.
    
 
   
     Gross profit. Gross profit increased $5.4 million, or 54.5%, from $9.8
million in Fiscal 1995 to $15.2 million in Fiscal 1996. As a percentage of
revenues, gross profit increased from 10.4% in Fiscal 1995 to 16.2% in Fiscal
1996. This increased percentage was primarily the result of increasing sales of
the Company's higher margin specialty brand products coupled with a decrease in
vessel crew and spotter pilot compensation resulting from the lower fish catch
in Fiscal 1996 compared to the previous Fiscal year.
    
 
                                       20
 

<PAGE>
<PAGE>

     Selling, general and administrative expenses. Selling, general and
administrative expenses increased $757,000, or 19.2%, from $3.9 million in
Fiscal 1996 to $4.7 million in Fiscal 1997. As a percentage of revenues,
selling, general and administrative expenses increased from 4.1% in Fiscal 1995
to 5.0% in Fiscal 1996. These increases were primarily due to several business
development projects initiated and completed during Fiscal 1996 (including
pursuit of domestic and international acquisitions, initial research relating to
improved fishing vessel designs and the analysis of plant enhancement projects)
and the relocation of the Company's Louisiana administrative offices.
 
     Operating income. As a result of the factors discussed above, the Company's
operating income increased to $10.5 million in Fiscal 1996 from $5.9 million in
Fiscal 1995. As a percentage of revenues, operating income increased to 11.2% in
Fiscal 1996 from 6.2% in Fiscal 1995.
 
   
     Other (expense) income. Other expense was $118,000 in Fiscal 1996 in
comparison to other income of $116,000 in the prior Fiscal year. This expense
was due primarily to losses on retirement of assets.
    
 
   
     Interest expense. Interest expense declined slightly from $1.1 million in
Fiscal 1995 to $1.0 million in Fiscal 1996. This decline resulted from the
Company's reduction in its average outstanding borrowings during Fiscal 1996
from the previous Fiscal year.
    
 
   
     Income taxes. The Company recorded a $3.5 million provision for income tax
for Fiscal 1996 for an effective tax rate of 36.9% in comparison to a $1.7
million provision, representing a 34.0% effective tax rate for Fiscal 1995. The
effective tax rates approximate the applicable combined state and federal
statutory tax rates for the respective periods.
    
 
QUARTERLY RESULTS
 
     The Company's menhaden harvesting and processing business is seasonal in
nature. The Company generally has higher sales during the menhaden harvesting
season (which includes the third and fourth quarter of each Fiscal year) due to
increased product availability, but prices during the fishing season tend to be
lower than during the off-season. As a result, the Company's quarterly operating
results have fluctuated in the past and may fluctuate in the future. In
addition, from time to time the Company defers sales of inventory based on
worldwide prices for competing products that affect prices for the Company's
products which may affect comparable period comparisons.
 
   
     The following table presents certain unaudited operating results for each
of the Company's preceding nine quarters. The results of operations for Venture
Milling are included through September 16, 1997, the date of its disposition.
The Company believes that the following information includes all adjustments
(consisting only of normal recurring adjustments) that the Company considers
necessary for a fair presentation, in accordance with generally accepted
accounting principles. The operating results for any interim period are not
necessarily indicative of results for any other period.
    
 
   
<TABLE>
<CAPTION>
                                                                    QUARTER ENDED
                         ---------------------------------------------------------------------------------------------------
                         DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,
                           1995       1996       1996       1996        1996       1997       1997       1997        1997
                         --------   --------   --------   ---------   --------   --------   --------   ---------   ---------
                                                                   (IN THOUSANDS)
<S>                      <C>        <C>        <C>        <C>         <C>        <C>        <C>        <C>         <C>
Revenues...............   $23,466    $14,383    $20,920     $34,840    $25,623    $22,964    $31,025     $37,952     $29,503
Gross profit...........     4,026      3,070      4,986       3,112      4,817      4,708      8,192       6,101      10,229
Operating income.......     3,063      1,980      3,771       1,690      3,792      3,503      6,451       4,459       9,075
Net income.............     1,725      1,114      2,200         889      2,225      2,185      3,713       2,302       5,312
</TABLE>
    
 
     The following table sets forth certain unaudited operations data as a
percentage of revenues for each of the Company's preceding eight quarters:
 
   
<TABLE>
<CAPTION>
                                                                         QUARTER ENDED
                              ---------------------------------------------------------------------------------------------------
                              DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,
                                1995       1996       1996       1996        1996       1997       1997       1997        1997
                              --------   --------   --------   ---------   --------   --------   --------   ---------   ---------
<S>                           <C>        <C>        <C>        <C>         <C>        <C>        <C>        <C>         <C>
Revenues....................    100.0%     100.0%     100.0%     100.0%      100.0%     100.0%     100.0%     100.0%      100.0%
Gross profit................     17.2       21.3       23.8        8.9        18.8       20.5       26.4       16.1        34.7
Operating income............     13.1       13.8       18.0        4.9        14.8       15.3       20.8       11.7        30.8
Net income..................      7.4        7.8       10.5        2.5         8.7        9.5       12.0        6.1        18.0
</TABLE>
    
 
                                       21
 

<PAGE>
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
 
     Prior to the Offering, the Company was a wholly-owned subsidiary of Zapata.
During Fiscal 1997, Zapata contributed to the Company as equity $41.9 million of
intercompany debt owed to Zapata. As a result, the historical liquidity and
capital resources of the Company may not be indicative of the Company's future
liquidity and capital resources.
 
   
     Operating activities provided $16.2 million, $10.1 million, $2.2 million
and $5.7 million of cash in Fiscal 1996, Fiscal 1997, First Quarter Fiscal 1997
and First Quarter Fiscal 1998, respectively, and used $118,000 of cash in Fiscal
1995. The First Quarter Fiscal 1998 increase over First Quarter Fiscal 1997
resulted primarily from the Company's improved operating results during that
quarter. The decline in Fiscal 1997 resulted primarily from an increase in
inventory balances. The Fiscal 1996 increase was primarily attributable to
improvement in the operating results for Fiscal 1996 over Fiscal 1995, increases
in amounts due to parent in Fiscal 1996 compared to decreases in Fiscal 1995 and
timing of accounts payable and accrued liabilities.
    
 
   
     The Company used $6.9 million, $4.0 million, $10.9 million, $1.7 million
and $29.6 million, respectively, for investing activities in Fiscal 1995, 1996
and 1997, the First Quarter Fiscal 1997 and the First Quarter Fiscal 1998,
respectively. The Company's investing activities consist mainly of capital
expenditures for equipment purchases and replacements.
    
 
   
     First Quarter Fiscal 1998's increase in net cash used in investing
activities resulted primarily from the American Protein Acquisition and the Gulf
Protein Acquisition, which the Company completed on November 3, 1997 and
November 25, 1997, respectively. The Company paid $29.0 million for these
acquisitions. The higher level of expenditures in Fiscal 1997 reflects the
complete refurbishment of two steamers for the Cameron, Louisiana plant, the
construction of a significant portion of the Moss Point, Mississippi dry dock
facility and enhancement of the Reedville, Virginia plant to increase its
production capacity for Special Select. Expenditures in Fiscal 1996 include the
refurbishment of a steamer and the refurbishment of docks, dryers and oil tanks
at the Reedville, Virginia plant. Excluding the Recent Acquisitions, the Company
anticipates making $13.8 million of capital expenditures in Fiscal 1998, a
significant portion of which will be used to refurbish vessels, docks and to
acquire certain equipment, including a new evaporation unit for the Reedville,
Virginia plant. The Company expects to finance such expenditures through
internally generated cash flows and, if necessary, through funds available from
the credit facility and/or Title XI financing described below.
    
 
   
     The Company's financing activities have historically consisted of
borrowings under a line of credit and borrowings of long-term debt which are
guaranteed by the U.S. Government under a program offered through NMFS pursuant
to Title XI of the Marine Act of 1936 ('Title XI financing'). Under the Title XI
financing program, the Company has the ability to secure loans through lenders
with terms generally ranging between 12 and 20 years at interest rates between
6% and 7% per annum which are enhanced with a government guaranty to the lender
for up to 80% of the financing. The Company's current Title XI borrowings are
secured by liens on 14 steamers and mortgages on the Company's Reedville,
Virginia and Abbeville, Louisiana plants. In 1996, Title XI financing was
modified to permit use of proceeds from this program for shoreside construction.
The Company is currently authorized to receive up to $23.0 million in loans
under this program. To date, the Company has used $15.0 million of these funds
and currently has an application pending for $2.6 million of Title XI financing
for refurbishing a vessel.
    
 
   
     Financing activities provided the Company with $8.2 million and $3.5
million of cash in Fiscal 1995 and 1997, respectively, and $1.7 million and
$28.6 million of cash in First Quarter Fiscal 1997 and in First Quarter Fiscal
1998, respectively. In Fiscal 1996, the Company used $10.6 million of cash in
financing activities. The increase in net cash provided by financing activities
during First Quarter Fiscal 1998 resulted from the Company's borrowing $28.1
million from Zapata to fund a portion of the combined purchase price due for the
Recent Acquisitions and the assumption of certain long-term debt in connection
with the Gulf Protein Acquisition. These borrowings bear interest at Zapata's
fixed borrowing rate of 8.5% per annum and will be repaid with a portion of the
net proceeds from this Offering. See 'Use of Proceeds.' Fiscal 1997 provided
cash as a result of borrowings under the Title XI financing program and secured
equipment financing provided by Hibernia National Bank. The use of
    
 
                                       22
 

<PAGE>
<PAGE>

cash in Fiscal 1996 is attributable to the Company's repayment of $21.1 million
on its prior line of credit, offset by borrowings of $11.1 million. In Fiscal
1995, cash was provided by additional borrowings.
 
   
     On December 30, 1997, SunTrust Bank, South Florida, N.A. issued a
commitment letter to the Company which provides for a new two year secured
revolving credit facility for the Company (the 'Credit Facility'). The
commitment letter states that, under the Credit Facility, the Company may make
borrowings in a principal amount not to exceed $20.0 million at any time.
Borrowings under this facility may be used for working capital and capital
expenditures. Interest will accrue on borrowings that will be outstanding under
the Credit Facility at the Company's election, either (i) the bank's prime rate
less 75 basis points or (ii) LIBOR plus a margin based on the Company's
financial performance. The Credit Facility will be secured by all of the
Company's assets not pledged to secure the Company's other borrowings exclusive
of the Company's rolling stock, vessels and real estate. The Company and its
subsidiaries will be subject to customary secured lending covenants, including
limitations on additional liens, additional indebtedness, sale of assets, annual
dividends above 50% of the Company's net income for the year, affiliate
transactions, certain loans, investments, acquisitions and fundamental corporate
changes. The Company and its subsidiaries will also be required to comply with
certain financial covenants, including maintenance of a minimum tangible net
worth, debt to tangible net worth ratio, funded debt to cash flow ratio and
fixed charges ratio. The Company intends to close the Credit Facility shortly
following the consummation of the Offering.
    
 
     The Company believes that the net proceeds from the Offering, borrowings
under the Credit Facility and cash flow from operations will be sufficient to
fund anticipated capital expenditures and working capital needs through Fiscal
1999.
 
   
YEAR 2000
    
 
   
     The Company has converted most of its computer information systems enabling
proper processing of transactions related to the year 2000 and beyond. The cost
of conversion was immaterial and has been expensed. The Company continues to
evaluate its systems and expects that all of its systems will be compliant prior
to the year 2000.
    
 
                                       23


<PAGE>
<PAGE>

                                    BUSINESS
 
     Omega Protein Corporation is the largest U.S. producer of protein-rich meal
and oil derived from marine sources. The Company markets a variety of products
derived from menhaden, a fish found in commercial quantities in coastal waters
off the U.S. mid-Atlantic and Gulf coasts. These products include regular grade
and value-added specialty fish meals, crude and refined fish oils and fish
solubles. The Company's fish meal products are used as protein additives by
animal feed manufacturers and by commercial livestock and poultry farmers. Fish
meal derived from menhaden generally possesses a higher protein content and a
superior amino acid profile than other fish meal produced in the U.S. The
Company's fish oil is used in hydrogenated form by European commercial food
processors in margarine and other shortenings. Due to its content of
nutritionally important omega-3 fatty acids, the oil is also used in Europe in
non-hydrogenated form as a nutritional supplement in foods such as bread, soup
and beverages. In its crude form, the Company's fish oil is used in aquaculture
feeds and certain industrial applications. Fish solubles are sold as protein
additives for animal feed and as organic fertilizers.
 
   
     The Company is the largest U.S. harvester and processor of menhaden. The
menhaden catch is processed in one of the Company's five plants (one of which
was recently acquired) located in Virginia, Mississippi and Louisiana. The
Company's processing operations are vertically integrated and include 66 fishing
vessels and 44 spotter aircraft. In Fiscal 1997, the Company processed
approximately 507,358 tons of menhaden (representing approximately 54% of the
total menhaden harvested in the U.S.) into approximately 124,985 tons of fish
meal, 71,562 tons of fish oil and 16,531 tons of fish solubles. During Fiscal
1997, the Company produced approximately 43% of all fish meal and approximately
58% of all fish oil produced in the U.S.
    
 
   
     In Fiscal 1997, the Company reported revenues of $117.6 million and
operating income of $18.2 million. Between Fiscal 1993 and Fiscal 1997,
operating income increased at a compound annual growth rate of 43%. On a pro
forma basis adjusted for the Venture  Milling Disposition as of October 1,
1996, the Company had revenues of $85.6 million and operating income
of $18.0 million in Fiscal 1997. During First Quarter Fiscal 1998, the
Company had revenues of $29.5 million and operating income of $9.1 million. In
early Fiscal 1998, the Company acquired certain operating assets of American
Protein and Gulf Protein, two of the four other remaining menhaden harvesters.
The Company anticipates that these acquisitions will enhance its harvesting and
processing capabilities.
    
 
   
     In June 1997, the FDA approved the use of refined, non-hydrogenated
menhaden oil for human consumption in the U.S. Menhaden oil is the only
non-hydrogenated fish oil approved by the FDA for human consumption. Menhaden
oil contains omega-3 fatty acids, which studies have linked to the prevention
and treatment of certain diseases, including hypertension, cardiovascular
disease, cancer and arthritis. The Company believes that this recent development
presents significant domestic market opportunities for its menhaden oil.
    
 
INDUSTRY OVERVIEW
 
PROTEIN FEED ADDITIVES
 
   
     Animal feed generally represents 50% to 70% of the total cost to raise an
animal from birth to production. To manage this cost, commercial livestock
farmers are demanding more efficient feeds which: (i) increase overall animal
weight gain; (ii) reduce the feed to weight gain ratio; (iii) increase the price
to performance relationship of certain feeds; (iv) increase animal birth
frequency and reduce time to market; and (v) improve animal health generally.
Major producers of animal feed, such as the Animal Nutrition Division of
Cargill, Inc. and Purina Mills, Inc., are increasingly relying upon protein feed
additives to meet farmers' demanding requirements. According to an industry
trade publication, worldwide demand for protein additives has increased from 158
million tons in 1992 to 190 million tons in 1997, with the strongest growth in
demand for protein additives coming from developing countries such as China and
Brazil due to improving economic conditions in these countries which have led to
increased demand for meat and, hence, animal feed and protein additives. Soybean
meal has traditionally been the primary protein additive for animal feed and
accounted for approximately 56% of total worldwide protein meal production in
1997. The balance of worldwide protein meal production was derived from
rapeseed, sunseed, cottonseed, fish and animal by-products.
    
 
                                       24
 

<PAGE>
<PAGE>

   
     Traditionally, the basis for competition among protein suppliers has been
price per ton. The Company believes that certain of its protein products derived
from menhaden are more desirable than alternative protein additives because fish
proteins are generally more easily digested and contain a superior amino acid
profile than competing protein additives, which enhance feed performance. For
example, the protein content of the Company's regular grade fish meal is
consistently in the range of 62% to 64% of total product weight compared to
soybean meal which generally has a 48% protein content. Building on this
advantage, the Company has been able to price its specialty feeds, Special
Select and Sea-Lac, at a premium to most competing products. The Company's fish
protein additives are used by, among others: (i) dairy feed producers seeking to
promote increased milk production; (ii) turkey and aquaculture feed producers
seeking to reduce the feed to weight gain ratios; (iii) swine feed producers
seeking quicker weight gain and reduced time to market; and (iv) pet food
manufacturers seeking consistent palatability.
    
 
   
     The Company believes, based on an industry trade publication, that total
worldwide production of fish meal has increased from 6.8 million tons in 1993 to
7.1 million tons for the twelve months ended September 30, 1997, representing a
compound annual growth rate of 0.8% during this period. The largest producers of
fish meal are companies located in Chile and Peru, with total production of 1.3
million tons and 2.3 million tons in these countries, respectively. Leading
consumers of fish meal are China and Japan. For the twelve months ended
September 30, 1997, U.S. production of fish meal totaled 288,135 tons, 72% of
which was produced from menhaden with the remainder generally produced from fish
remnants generated from the processing of other fish species which generally
contain lower levels of protein and amino acids and higher levels of ash. Of the
207,863 tons of protein meal produced from menhaden for the 12 months ended
September 30, 1997, the Company produced 124,985 tons or 60%.
    
 
EDIBLE AND INDUSTRIAL OILS
 
   
     The Company derives oil from menhaden processing. Oils are classified for
either edible or industrial use with edible oil being the largest portion of
this market. Edible applications include use in hydrogenated form (hydrogenating
involves creating a solid product from a liquid through the addition of
hydrogen) for margarine and other shortenings, and use in non-hydrogenated form
as a nutritional supplement in processed foods, such as breads, soups and
beverages. Industrial oil applications include use in leather tanning,
lubricants, chemicals, paints and animal feeds. In the animal feed segment, the
major application is for aquaculture feeds. The Company believes, based on data
available from an United Nations' organization, that fish oil usage for
aquaculture in 1995 was 450,000 tons and that by the year 2000, aquaculture
usage will grow to approximately 550,000 tons.
    
 
   
     In June 1997, the FDA approved the use of refined (non-hydrogenated)
menhaden oil for human consumption in the U.S. Refined (non-hydrogenated)
menhaden oil is the only non-hydrogenated fish oil approved by the FDA for human
consumption. Menhaden oil contains omega-3 fatty acids which have been linked by
researchers to the prevention of hypertension, cardiovascular diseases, cancer
and arthritis. The Company has begun to market refined (non-hydrogenated)
menhaden oil as a supplement to various processed and packaged foods which will
support the marketing of these food products as healthier alternatives. The use
of omega-3 rich oil in products for human consumption is already established in
Europe and Asia. The Company believes U.S. markets will be highly receptive to
menhaden oil supplements in processed foods due to (i) increased interest in
healthier lifestyles, (ii) the publication of research findings supporting the
positive health effects of omega-3 fatty acids consumption, and (iii) aging of
the population and the tendency of consumers to purchase more healthy foods as
they age.
    
 
   
SOLUBLES
    
 
   
     Fish solubles are a by-product of the fish meal production process and are
a liquid protein product used as an additive in animal feeds and as an organic
fertilizer. The Company has traditionally used fish solubles as an additive to
fish meal in order to increase overall protein content. The Company has also
been successful in a recent initiative to market solubles as a natural means of
soil enhancement. The Company believes that increasing consumer demand for
organically raised products may support a growing market for its solubles as a
natural replacement for chemical fertilizers. For example, the
    
 
                                       25
 

<PAGE>
<PAGE>

   
Company believes, based on trade publications, that retail organic food sales
have doubled in the U.S. between 1992 and 1996.
    
 
   
BUSINESS STRATEGY
    
 
   
     The Company's strategy is to continue to enhance its position as the
leading domestic supplier of value-added marine protein and oil products, to
become the leading domestic supplier of omega-3 rich oil for human consumption
and to broaden its product offerings and geographical markets. The principal
elements of this strategy include:
    
 
   
     Development of Value-Added Products. The Company intends to focus on
further developing higher margin, high performance marine protein and oil
products which have a sustainable and differentiated competitive advantage. The
Company believes that the development of specialty products will enable it to
command premium prices, higher margins and further strengthen brand recognition.
To date the Company has successfully developed two value-added fish meal
products, Special Select and Sea-Lac, which have generated unit volume growth at
a compound annual growth rate of 16.9% since 1993. In comparison, the Company
believes, based on data provided by an industry trade publication, that
worldwide fish meal production grew at a compound annual growth rate of
approximately 0.8% during the same time period. The Company is also leveraging
its product development expertise to enter new markets, including refined
(non-hydrogenated) fish oils for human consumption and organic fertilizers.
    
 
     Exploit Domestic Market for Omega-3 Fatty Acids. Menhaden oil contains
omega-3 fatty acids, which studies have linked to the prevention of diseases
such as hypertension, cardiovascular disease, cancer and arthritis. In June
1997, the FDA approved the use of refined (non-hydrogenated) menhaden oil for
human consumption in the United States. Currently, there are no other
non-hydrogenated fish oils approved by the FDA for human consumption. The
Company plans to market refined (non-hydrogenated) menhaden oil as a supplement
to various processed and packaged foods which will support the marketing of
these foods products as healthier alternatives. As a result of its experience in
serving international edible fish oil markets and its position as the only
domestic producer of refined (non-hydrogenated) menhaden oil, the Company
believes that it is well positioned to become the leader in this developing
market.
 
   
     Maintain Leading Domestic Market Position. The Company is currently the
largest menhaden processor in the U.S., operating 51 steamers, with the next two
largest menhaden competitors operating a combined total of 12 steamers. During
Fiscal 1997, the Company processed approximately 54% of all menhaden processed
in U.S. markets. After integrating the assets acquired in the Recent
Acquisitions which occurred in early Fiscal 1998, the Company anticipates that
it will harvest approximately 80% of all menhaden harvested in U.S. markets in
Fiscal 1998. The Company's leading position enables it to secure a steady supply
of menhaden fish (subject to natural conditions) as well as serve its large
national customers as a reliable first source for marine protein and oil
products.
    
 
     Continue Strategic Acquisitions. The Recent Acquisitions have increased the
size of the Company's processing capabilities and are expected to increase its
harvesting capabilities. The Company believes that it can further improve its
competitive position by making acquisitions in South America or the U.S. West
Coast, which would provide it with year-round harvesting capabilities and a
production location from which to significantly increase the Company's presence
in the Asian market. The Company also intends to pursue complimentary product
acquisitions, such as producers of other valued added animal proteins, which
will allow it to enter new niche markets.
 
PRODUCT LINES
 
     The Company produces meal, oil and solubles from the menhaden which it
harvests. In Fiscal 1997, the Company harvested approximately 507,358 tons of
menhaden which were processed into approximately 63,835 tons of regular grade
fish meal, 46,409 tons of Special Select, 14,741 tons of Sea-Lac, 61,905 tons of
crude fish oil, 9,657 tons of refined fish oil and 16,531 tons of fish solubles.
 
                                       26
 

<PAGE>
<PAGE>

FISH MEAL
 
     The Company produces three grades of fish meal: regular grade meal and two
specialty meals that are sold under Company-owned brand names, Special Select
and Sea-Lac. Fish meal is sold primarily as a high-protein ingredient and
supplement in commercial livestock, dairy, poultry, aquaculture and pet feeds to
enhance feed performance. The Company's fish meal products are marketed with
strict quality and protein content standards, requiring careful monitoring of
the freshness of the fish and processing conditions.
 
     The Company processes its highest quality fish, as measured by freshness,
into Special Select and Sea-Lac. These products are marketed to specific niches
of the animal feed market. Special Select is an easily digestible protein which
facilitates greater protein absorption to meet the nutritional needs of young
animals. Special Select was originally introduced for use in piglet feed to
promote rapid weaning, thereby permitting sows to reproduce faster. This, in
turn, reduces the average number of days to market for piglets. After
successfully marketing this product to the pig market, the Company began selling
Special Select to new markets, including manufacturers of turkey and aquaculture
feed. Sea-Lac is used in the dairy industry as a by-pass protein product which
increases a cow's level of milk production. A by-pass protein delivers protein
more effectively into the cow's digestive system by escaping bacterial
degradation in the rumen.
 
     Fish meal prices are related to the prices for soybean meal, the most
commonly available protein additive. Fish meal generally has a higher level of
protein than soybean meal and, therefore, is typically priced at a premium to
soybean meal on a per ton basis. Fish meal prices are also influenced by the
level of fish caught each season and fluctuate within the fishing season. The
storage life of fish meal is approximately one year, and fish meal prices are at
their lowest during the peak fishing season when other fish meal processors sell
the majority of their production due to lack of storage facilities. Since the
Company operates storage facilities, it can stockpile inventory for sale during
the offseason giving it the ability to meet the year-round demand for fish meal
and achieve higher average selling prices for its products when competing
supplies are limited.
 
     During the last three years, the worldwide demand for protein has increased
at a rate faster than the supply of protein, resulting in increased prices. In
addition, during the last three years, the Company's specialty brand products
have gained greater acceptance in niche markets due to their special performance
characteristics.
 
   
     On a pro forma basis, the Company's fish meal sales constituted 66.1% of
the Company's Fiscal 1997 revenues. The following table summarizes the Company's
fish meal sales in tons and the weighted average selling price per ton for the
indicated periods:
    
 
   
<TABLE>
<CAPTION>
                                       YEAR ENDED SEPTEMBER 30,               THREE MONTHS ENDED DECEMBER 31,
                           ------------------------------------------------   -------------------------------
                                                          AVERAGE SELLING       SALES    AVERAGE SALES PRICE
                                  SALES IN TONS            PRICE PER TON       IN TONS         PER TON
                           ---------------------------   ------------------    -------   -------------------
PRODUCT TYPE                1995      1996      1997     1995   1996   1997     1997            1997
- -------------------------  -------   -------   -------   ----   ----   ----    -------   -------------------
 
<S>                        <C>       <C>       <C>       <C>    <C>    <C>     <C>       <C>
Regular Grade............  108,435    61,494    51,995   $329   $383   $457     10,429           $470
Special Select...........   37,084    38,964    47,217    405    495    547     14,053            589
Sea-Lac..................    7,790     9,379    13,917    370    431    509      3,501            528
                           -------   -------   -------                         -------
     Total...............  153,309   109,837   113,129                          27,983
                           -------   -------   -------                         -------
                           -------   -------   -------                         -------
</TABLE>
    
 
OIL
 
     The Company produces fish oil from menhaden in both a crude and refined
form for the European, Japanese and Mexican food industries, the animal feed
industry, the aquaculture industry and certain niche industrial applications.
Depending on its use, fish oil may be sold in its crude form, partially
processed for use in leather tanning, lubricants, chemicals, paints or other
industrial products or further processed by refining for use in margarine and
other shortenings in hydrogenated form and for use in health foods and health
source supplements in non-hydrogenated form. When used in margarine and other
shortenings, prices for fish oil are generally influenced by prices for
alternative vegetable fats and oils, such as soybean and palm oils.
 
                                       27
 

<PAGE>
<PAGE>

     Refined (non-hydrogenated) menhaden oil contains omega-3 fatty acids which
have been linked by research studies to the prevention of certain diseases. In
June, 1997, the FDA approved the use of refined (non-hydrogenated) menhaden oil
for human consumption in the United States. Currently, there are no other
non-hydrogenated fish oils approved by the FDA for human consumption. The
Company plans to market refined (non-hydrogenated) menhaden oil as a supplement
to various processed and packaged foods which will support the marketing of
these food products as healthier alternatives.
 
   
     On a pro forma basis, the Company's fish oil sales constituted 27.8% of the
Company's Fiscal 1997 revenues. The following table summarizes the Company's oil
sales in tons and the weighted average selling price per ton for the indicated
periods:
    
 
   
<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED DECEMBER 31,
                                    YEAR ENDED SEPTEMBER 30,                -------------------------------
                       --------------------------------------------------    SALES
                                                       AVERAGE SELLING         IN      AVERAGE SALES PRICE
                             SALES IN TONS              PRICE PER TON         TONS           PER TON
                       --------------------------    --------------------    ------    -------------------
PRODUCT TYPE            1995      1996      1997     1995    1996    1997     1997            1997
- --------------------   ------    ------    ------    ----    ----    ----    ------    -------------------
 
<S>                    <C>       <C>       <C>       <C>     <C>     <C>     <C>       <C>
Crude Oil...........   79,644    52,257    44,007    $321    $390    $424    22,329            $539
Refined Oil.........    8,447     8,814     9,747     448     510     529     1,923             552
                       ------    ------    ------                            ------
     Total..........   88,091    61,071    53,754                            24,252
                       ------    ------    ------                            ------
                       ------    ------    ------                            ------
</TABLE>
    
 
FISH SOLUBLES
 
     Fish solubles are a liquid protein product used as an additive in fish meal
and also marketed as an independent product to animal feed formulators and the
fertilizer industry. Solubles are sold to the pet food, livestock feed and
aquaculture industries. The Company has experienced recent success introducing a
value-added fish soluble product as an organic fertilizer for golf courses and
as a natural alternative to chemical fertilizer inputs for various row crop and
horticulture products. Fish solubles have begun to gain acceptance in these
markets because, unlike other organic products, they are suitable for spray
applications.
 
     In Fiscal 1997, the Company produced approximately 54,572 tons of fish
solubles, of which 38,041 tons were used as additives to the Company's products
and 16,531 tons were sold to third parties. On a pro forma basis, fish solubles
sales represented 4.2% of the Company's Fiscal 1997 revenues.
 
NETS
 
     The Company manufactures the nets used in its menhaden harvesting
operations. In Fiscal 1997, the Company used approximately 60.0% of the finished
nets for its own operations and generated $1.1 million of revenues from sales of
nets to third parties.
 
SALES, MARKETING AND DISTRIBUTION
 
   
     The Company markets its products through a staff of nine sales personnel
located at its Hammond, Louisiana administrative offices. The Company sells its
products to manufacturers and processors who incorporate them into their
finished goods. The Company sells to more than 300 customers, including Ralston
Purina Company, Purina Mills, Inc., Friskies PetCare Company, the Animal
Nutrition Division of Cargill, Inc. and Unilever Raw Materials B.V.
    
 
   
     Approximately 35% of the Company's fish meal sales in Fiscal 1997 were made
to customers in Mississippi, North Carolina, Georgia, Iowa, Texas and Arkansas.
Total sales to the Company's top ten customers represented approximately 23.8%
of the Company's Fiscal 1997 revenues; no single customer accounted for more
than 5.4% of the Company's Fiscal 1997 revenues. The majority of the Company's
fish oil is sold to export markets, including Canada, Japan, Mexico and The
Netherlands. Sales of products outside the U.S., principally in Europe, Canada,
Mexico and Japan, constituted 25.1% of the Company's pro forma revenues, and
30.7% and 27.5% of revenues for Fiscal 1995 and 1996, respectively. The
Company's sales to these foreign markets are denominated in U.S. dollars.
    
 
   
     The Company's products are an important performance component of its
customers' products. In Fiscal 1997, approximately 35% of the Company's regular
grade fish meal was sold on a two to six
    
 
                                       28
 

<PAGE>
<PAGE>

   
month forward contract basis. The balance of regular grade fish meal and other
products was substantially sold on a spot basis through purchase orders.
    
 
     The Company believes that its success in marketing its products is
attributable to four key factors:
 
          Quality. Many of the Company's products are used to ensure and enhance
     the performance of its customers' end products and, therefore, consistency
     and high quality are essential. The Company assures the consistent high
     quality of its products through rigorous testing at its five quality
     control laboratories where staff personnel constantly sample and analyze
     the Company's products for protein levels, digestibility, fatty acid
     content, moisture and impurities.
 
   
          Year-Round Availability. While the menhaden fishing season usually
     extends from April to December, the Company endeavors to meet the demands
     of its customers by making prompt and reliable delivery of the Company's
     products on a year-round basis which also allows the Company to benefit
     from higher off-season prices for its products. This is accomplished
     through the use of storage facilities located at the Company's processing
     plants, three strategically located leased regional warehouses in
     Guntersville, Alabama, St. Louis, Missouri and Dubuque, Iowa and a leased
     liquid oil tank depot in New Orleans, Louisiana. Since the Company's
     customers are principally manufacturers and processors, its products are
     distributed mainly in bulk from the Company's processing plants or storage
     facilities directly to the customers' facilities. The Company uses various
     common carriers to transport its products to the desired locations,
     including railway, truck, barge and vessel carriers. The Company
     contracts on an annual basis with liquid and dry meal barge carriers and
     ocean going vessel carriers. The Company believes that it is the only
     marine protein and oil producer that provides products in the U.S.
     throughout the year.
    
 
          Technical Sales Force. Because of the specialized nature of many of
     the niche markets the Company serves, its sales force must have technical
     knowledge of the Company's products and the applications for which they are
     used. The Company employs sales personnel with significant industry and
     technical expertise.
 
          Customer Driven Research and Development. The Company makes grants to
     several university agricultural research departments to perform research
     projects identified by the Company. The Company's research activities are
     often developed jointly with customers enabling the Company to gain a
     better understanding of customer's formulating needs and process
     technology. The Company believes that university research enhances sales of
     its products and results in stronger customer relationships. The Company
     maintains a central laboratory in Hammond, Louisiana, to coordinate these
     research activities.
 
HARVESTING AND PROCESSING
 
   
     Fishing. The Company owns a fleet of 66 steamers (51 of which are directly
involved in the harvesting operations) and owns 33 and leases 11 spotter
aircraft (41 of which are directly involved in locating menhaden). The Company's
operations in the U.S. Gulf coast are supported by 38 steamers and 32 spotter
aircraft and its operations off the mid-Atlantic coast are supported by 13
steamers and 9 spotter aircraft. The Company's fishing area in the Gulf
stretches from the south Texas coastline to the panhandle of western Florida,
with fishing operations concentrated off the Louisiana and Mississippi coasts.
The Company's fishing area in the Atlantic extends from North Carolina to New
Jersey. The fishing season runs from mid-April through October in the Gulf coast
and May through December in the Atlantic coast.
    
 
   
     The Company's principal raw material is menhaden, a species of fish that
inhabit coastal and inland tidal waters in the U.S. Menhaden are undesirable for
human consumption due to their small size, boniness and high oil content.
Certain state agencies impose resource depletion restrictions on menhaden
fishing pursuant to fish management legislation. To date, the Company has not
experienced any material adverse impact on its fish catch or operations as a
result of these restrictions.
    
 
                                       29
 

<PAGE>
<PAGE>

     The following table shows the total tons of menhaden harvested in the
Atlantic Ocean and the Gulf coast waters for the last five years as reported by
NMFS:
 
   
<TABLE>
<CAPTION>
                                                               TWELVE MONTHS ENDED
                                   ---------------------------------------------------------------------------
                                   DEC. 1993    DEC. 1994    DEC. 1995    DEC. 1996    SEPT. 1997    DEC. 1997
                                   ---------    ---------    ---------    ---------    ----------    ---------
                                                                    (IN TONS)
<S>                                <C>          <C>          <C>          <C>          <C>           <C>
Menhaden(1).....................    947,787     1,126,144     886,056      851,333       943,717      928,465
</TABLE>
    
 
- ------------
 
(1) The number of menhaden caught has been converted to short tons using the
    NMFS fish catch conversion ratio.
 
     Menhaden usually school in large, tight clusters and are commonly found in
warm, shallow coastal waters. Spotter aircraft locate the schools and direct the
steamers accordingly. Steamers range in size from 165 to 180 feet. The steamers
transport two 40-foot purse boats, each carrying several fishermen and one end
of a 1,500-foot net. The purse boats encircle the school and capture the school
in the net. The fish are pumped from the net into refrigerated holds of the
steamer. Each steamer has a capacity to hold between 500 to 600 tons of fish and
is equipped with a modern refrigeration system that recycles chilled water over
the stored fish to maintain their freshness until unloading. The steamers
generally make day and over-night fishing voyages though, in some instances, the
steamers will fish continuously for up to a week. Upon returning to the plants,
the steamers are unloaded quickly to maintain the freshness of the menhaden,
which is critical to the digestibility of the meal produced from the fish.
 
     Processing Plants. The Company operates five on-shore menhaden processing
plants. The chart below sets forth certain information concerning the Company's
processing facilities at November 30, 1997:
 
<TABLE>
<CAPTION>
                                                           EMPLOYEES
                                                       -----------------                             TOTAL %
                                                       FISHING     OFF                   SPOTTER     OF 1997
FACILITY                                               SEASON     SEASON    STEAMERS    AIRCRAFT      CATCH
- ----------------------------------------------------   -------    ------    --------    ---------    --------
<S>                                                    <C>        <C>       <C>         <C>          <C>
Abbeville, LA.......................................     233         76        10            9           26%
Cameron, LA.........................................     297         80        13           11           33
Moss Point, MS......................................     190         51         9            6           15
Reedville, VA.......................................     279        109        13            9           26
Morgan City, LA(1)..................................    --           25         6            6         --
                                                       -----      -----        --           --          ---
     Total..........................................     999        341        51           41          100%
                                                       -----      -----        --           --          ---
                                                       -----      -----        --           --          ---
</TABLE>
 
- ------------
 
(1) The Company acquired the Morgan City plant from Gulf Protein in November
    1997 and will not operate this facility until the beginning of the 1998
    fishing season.
 
     As of November 30, 1997, these plants had an aggregate capacity to process
approximately 950,000 tons of fish annually. The Company's processing plants are
located in coastal areas near the Company's fishing fleet. Annual volume
processed varies depending upon menhaden catch and demand. Each plant maintains
a dedicated dock to unload fish, fish processing equipment and storage capacity.
The Reedville, Virginia facility contains an oil refining plant and net making
facility. The Company periodically reviews possible application of new
processing technologies in order to enhance productivity and reduce costs.
 
   
     The Company owns the Reedville, Virginia, Moss Point, Mississippi and
Abbeville, Louisiana plants and the real estate on which they are located
(except for a small leased parcel comprising a portion of the Abbeville,
Louisiana real estate). The Company leases from unaffiliated third parties the
real estate on which the Cameron, Louisiana and Morgan City, Louisiana plants
are located. The Cameron plant lease provides for a 10 year term ending on June
30, 2002 (with two successive 10 year options) and annual rent of $50,000. The
Morgan City plant lease provides for a 5 year term beginning on November 25,
1997 at an annual rent of $220,000. The Company has an option under the Morgan
City lease to purchase the plant for $656,000 during the last month of the lease
or earlier if all rent through the end of the term is paid.
    
 
   
     Processing. Prior to processing, the fish are evaluated for freshness
through visual inspection and measurement of total volatile nitrogen (which
increases as fish decay). The highest quality fish are selected for specialty
grade meal and the balance are used for regular grade meal. After evaluation,
the
    
 
                                       30
 

<PAGE>
<PAGE>

unloaded fish are transferred into steam cookers. After cooking, the fish are
passed through presses to remove substantially all of the oil and water. The
remaining solid portions of the fish are dried in rotary drum driers and then
ground into fish meal. Fish processed into specialty grade meal are dried at a
lower temperature than fish processed into regular grade meal. The lower drying
temperature enhances the digestibility level of the specialty grade meals. The
liquid side stream of the cooking and pressing operations contains oil, water,
dissolved protein and some fish solids. This liquid is passed through a decanter
to remove the solids and is then put through a centrifugal oil/water separation
process. The separated fish oil may be further refined by winterizing,
deodorizing, bleaching and polishing. The separated water and protein mixture is
further processed through evaporators to remove the soluble protein, which can
be sold as a finished product or added to the solid portions of the fish for
processing into fish meal.
 
   
     Dry Dock Facilities. In July 1997, the Company commenced construction of a
dry dock facility in Moss Point, Mississippi to address the shortage of
shoreside maintenance in the U.S. Gulf coast and the increasing costs of these
services. The facility was completed in March 1998. The Company is using this
facility and other outside facilities to perform routine maintenance to its
fishing fleet. The Company will also provide shoreside maintenance services to
third party vessels if excess capacity exists. The Company believes this
facility will allow it to better control its future vessel maintenance and
refurbishment costs.
    
 
INSURANCE
 
   
     The Company maintains insurance against physical loss and damage to its
assets, coverage against liabilities to third parties it may incur in the course
of its operations, as well as workers' compensation, United States Longshoremen
and Harbor Workers' Act and Jones Act coverages. Assets are insured at
replacement cost, market value or assessed earning power. Specifically, the
Company's fishing fleet is currently covered by hull and machinery insurance and
its owned or leased spotter aircraft are currently covered by aviation
insurance. The Company's potential liabilities to employees and third parties
are covered by various policies including protection and indemnity and marine
oil pollution policies. The Company's limits for liability coverage are
statutory or $50.0 million. The $50.0 million limit is comprised of several
excess liability policies which are subject to deductibles, underlying limits
and exclusions. The Company believes its insurance coverage to be in such form,
against such risks, for such amounts and subject to such deductibles as are
prudent and normal for its operations.
    
 
COMPETITION
 
   
     The marine protein and oil business is subject to significant competition
from producers of vegetable and other animal protein products and oil products
such as Archer-Daniels Midland, Inc. and Cargill, Inc. In addition, but to a
lesser extent, the Company competes with international marine protein and oil
producers, including Scandinavian herring processors and South American anchovy
and sardine processors. Many of these competitors and have greater financial
resources and more extensive operations than the Company. The Company's products
compete mainly on price, and to a lesser extent on quality and performance
characteristics, such as protein level and amino acid profile in the case of
fish meal.
    
 
REGULATION
 
     The Company's operations are subject to federal, state and local laws and
regulations relating to the location and periods in which fishing may be
conducted. At the state and local level, certain state and local governmental
agencies have either enacted legislation and regulations or have the authority
to enact such legislation and regulations to prohibit or limit menhaden fishing
within their jurisdictional waters. Delaware, Florida, Maryland and South
Carolina have enacted legislation that prohibits the taking of menhaden from
their respective tidal waters. New York, Virginia, New Jersey and Mississippi,
have enacted legislation or have the authority to enact legislation prohibiting
menhaden fishing in certain areas within their respective tidal waters and/or
have established minimum distances from the coast line where menhaden fishing is
permitted. The laws of certain states regulate, among other things:
 
                                       31
 

<PAGE>
<PAGE>

(i) type and size of menhaden vessels permitted to engage in fishing activities
within a state's tidal waters; (ii) length of the fishing seasons; (iii) level
of fish catch; (iv) fees, licenses and permits required in connection with
menhaden fishing activities; and (v) legal gear and equipment used in fishing.
Violations of these laws and regulations can result in substantial penalties
ranging from forfeiture of the unlawful menhaden fish catch, revocation of
licenses and permits, forfeiture of vessels involved and various other penalties
and sanctions. The Company endeavors to comply with all applicable laws and
regulations pertaining to menhaden fishing. To date, the Company has not
experienced any material impact on its fish catch or operations as a result of
these regulations.
 
   
     The Company's operations are also subject to federal, state and local laws
and regulations relating to safety matters. The Company, through its operation
of fishing vessels, is subject to the jurisdiction of the U.S. Coast Guard, the
National Transportation Safety Board and the U.S. Customs Service, which set
safety standards for vessel operations and are authorized to investigate vessel
accidents and recommend improved safety standards. The U.S. Customs Service is
authorized to inspect vessels at will. The Company's shoreside operations are
subject to the federal Occupational Safety and Health Act ('OSHA').
    
 
   
     The Company's operations are further subject to federal, state and local
laws and regulations relating to the protection of the environment, including
the Clean Water Act which imposes strict controls against the discharge of oil
and other water pollutants into navigable waters. The Clean Water Act also
imposes penalties for any discharge of pollutants in reportable quantities and,
along with the Oil Pollution Act of 1990, imposes substantial liability for the
costs of oil removal, remediation and damages. The Company's operations also are
subject to the federal Clean Air Act, as amended; the federal Resource
Conservation and Recovery Act, which regulates treatment, storage and disposal
of hazardous wastes; the federal Comprehensive Environmental Response,
Compensation and Liability Act, which imposes liability, without regard to
fault, on certain classes of persons that contributed to the release of any
'hazardous substance' into the environment. The OSHA hazard communications
standard, the Environmental Protection Agency community right-to-know
regulations under Title III of the federal Superfund Amendment and
Reauthorization Act and similar state statutes require the Company to organize
information about hazardous materials used or produced in its operations.
Certain of this information must be provided to employees, state and local
governmental authorities and local citizens. Numerous other environmental laws
and regulations, along with similar state laws, also apply to the marine protein
and oil operations of the Company, and all such laws and regulations are subject
to change.
    
 
   
     The Company has made, and anticipates that it will make in the future,
expenditures in the ordinary course of its business to remain in compliance with
safety and environmental regulations. Such expenditures have not been material
in the past and are not expected to be material in the future. However, there is
no assurance that safety and environmental laws and regulations enacted in the
future will not adversely affect the Company's operations.
    
 
     The Company's harvesting operations are subject to certain federal maritime
laws and regulations which require, among other things, that the Company be
incorporated under the laws of the U.S. or a state, the Company's chief
executive officer be a U.S. citizen, no more of the Company's directors be
non-citizens than a minority of the number necessary to constitute a quorum and
at least 50% of the Company's outstanding capital stock (including a majority of
the Company's voting capital stock) be owned by U.S. citizens. If the Company
fails to observe any of these requirements, it will not be eligible to conducts
its harvesting activities in U.S. jurisdictional waters. Such a loss of
eligibility would have a material adverse affect on the Company.
 
EMPLOYEES
 
   
     At August 30, 1997, the peak of the Company's 1997 fishing season, the
Company employed approximately 1,000 persons, of whom approximately 400 were
employed on a permanent basis and approximately 600 were employed on a part-time
basis through the end of the fishing season. At January 1, 1998, which is during
the Company's off season, the Company employed approximately 554 persons, all on
a full-time basis. Of these full-time employees, 45 were employed in sales,
marketing, administration and finance, and 509 employees were employed in the
processing plants and the drydock
    
 
                                       32
 

<PAGE>
<PAGE>

facility. During the off season, plant employees generally perform maintenance
to the Company's facilities. Approximately 290 employees are represented by an
affiliate of the United Food and Commercial Workers Union under a collective
bargaining agreement which expires April 22, 2000. The Company has not
experienced any strike or work stoppage which had a material impact on
operations. The Company considers its employee relations to be generally
satisfactory.
 
LEGAL PROCEEDINGS
 
   
     The Company is involved in various claims and disputes arising in the
normal course of business. The Company believes that it has adequate insurance
coverage against such matters and that the outcome of all pending proceedings,
individually and in the aggregate, will not have a material adverse effect upon
the Company's business, results of operations, cash flows or financial position.
    
 
                                       33


<PAGE>
<PAGE>

                                   MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
     The Company's executive officers and directors are as follows:
 
   
<TABLE>
<CAPTION>
                    NAME                        AGE                        POSITION
- ---------------------------------------------   ---   --------------------------------------------------
<S>                                             <C>   <C>
Joseph L. von Rosenberg III(1)(2)............   39    Chief Executive Officer, President and Director
                                                
Robert W. Stockton...........................   47    Executive Vice President and Chief Financial
                                                      Officer
                                                      
Kelsey D. Short, Jr..........................   43    Senior Vice President-Marketing and Product
                                                      Development
                                                      
Clyde R. Gilbert.............................   59    Senior Vice President-Operations
                                                
Eric T. Furey................................   35    Vice President, General Counsel and Corporate
                                                      Secretary
                                                      
Michael E. Wilson............................   46    President, Moss Point Drydock and Fabrication, Inc.

Malcolm I. Glazer(1)(2)......................   69    Director
                                                
Avram A. Glazer(1)(2)........................   37    Chairman of the Board of Directors and Director
                                                
</TABLE>
    
 
- ------------
 
(1) Member of Compensation Committee
 
(2) Member of Audit Committee
 
   
     Joseph L. von Rosenberg III is President and Chief Executive Officer of the
Company. He has served in these positions since July 1997. Mr. von Rosenberg is
also Executive Vice President of Zapata, a position he has held since November
1995. Prior to becoming Executive Vice President of Zapata, Mr. von Rosenberg
served as General Counsel of Zapata from August 1994 to July 1997 and Corporate
Secretary of Zapata from June 1993 to July 1997. From August 1994 through
November 1995, Mr. von Rosenberg also held the position of Vice President of
Zapata. Prior to joining Zapata in June 1993, he served as General Counsel and
Corporate Secretary of The Simmons Group. Mr. von Rosenberg intends to resign as
Executive Vice President of Zapata prior to the consummation of the Offering.
    
 
     Robert W. Stockton is Executive Vice President and Chief Financial Officer
of the Company. He has served in these positions since July 1997. For the five
years prior to joining the Company, Mr. Stockton was Vice President and Chief
Financial officer of The Simmons Group and also served as Corporate Controller
of Proler International Corp.
 
     Kelsey D. Short, Jr. is Senior Vice President-Marketing and Product
Development of the Company. He has served in this position since November 1993.
From 1985 to 1993, Mr. Short held a variety of positions in the Company's
marketing department, including Regional Sales Manager, Specialty Meal Manager
and Director of Product Development.
 
   
     Clyde R. Gilbert is Senior Vice President-Operations of the Company. He has
served in this position since July 1997. Prior to assuming this position, Mr.
Gilbert served as Vice President -- Finance and Controller of the Company since
1990.
    
   
     Eric T. Furey has served as General Counsel and Corporate Secretary of the
Company since January 1998. Mr. Furey is also General Counsel and Corporate
Secretary of Zapata, a position he has held since July 1997. He was engaged in
the private practice of law for more than five years before joining the Company.
Mr. Furey intends to resign as General Counsel and Secretary of Zapata prior to
the consummation of the Offering.
    
     Michael E. Wilson is President of the Company's wholly-owned subsidiary,
Moss Point Drydock and Fabrication, Inc., a position he has held since June
1997. Since 1996, he has also served as the Company's Coordinator of Marine
Engineering & Maintenance. Mr. Wilson joined the Company in 1985 and served in
various operating capacities until 1996.
 
     Malcolm I. Glazer has been a director of the Company since January 1998. He
is also a director and Chairman of the Board of Directors of Zapata, positions
he has held since July 1993 and July 1994, respectively. From August 1994 to
March 1995, Mr. Glazer has served as President and Chief Executive
 
                                       34
 

<PAGE>
<PAGE>

Officer of Zapata. Mr. Glazer has also been a self-employed private investor for
more than five years whose diversified portfolio consists of ownership of the
Tampa Bay Buccaneers National Football League franchise and investments in
television broadcasting, restaurants, restaurant equipment, food services
equipment, health care, banking, real estate and stocks. He is also a director
of Specialty Equipment Companies, Inc. Malcolm I. Glazer is the father of Avram
A. Glazer.
 
     Avram A. Glazer has been a director of the Company since January 1998. He
is also a director and President and Chief Executive Officer of Zapata,
positions which he has held since July 1993 and March 1995, respectively. For
the past five years, he has been employed by, and has worked on behalf of,
Malcolm I. Glazer and a number of entities owned and controlled by Malcolm I.
Glazer. He also serves as a director of Specialty Equipment Companies, Inc.
Avram A. Glazer is the son of Malcolm I. Glazer.
 
   
     The Company intends to elect two independent directors to the Company's
Board within three months after consummation of the Offering.
    
 
BOARD COMMITTEES
 
     The Company's Board has established an Audit Committee and a Compensation
Committee. The Board will establish, promptly following consummation of the
Offering, a Conflicts Committee.
 
     The Audit Committee reviews the adequacy of the Company's internal control
systems and financial reporting procedures, reviews the general scope of the
annual audit and reviews and monitors the performance of non-audit services by
the Company's independent public accountants. The Audit Committee also meets
with the independent auditors and with appropriate financial personnel of the
Company regarding these matters. The Audit Committee recommends to the Company's
Board the appointment of the independent auditors. The independent auditors
periodically will meet alone with the Audit Committee and will have unrestricted
access to the Audit Committee.
 
     The Compensation Committee administers management incentive compensation
plans and makes recommendations to the Company's Board with respect to the
compensation of directors and officers of the Company.
 
     The Conflicts Committee will review all proposed transactions between the
Company and Zapata to evaluate the fairness of the transaction to the Company.
The Conflicts Committee will consist solely of independent directors.
 
DIRECTOR COMPENSATION
 
   
     Each director who is not an employee of the Company receives $1,000 for
each meeting of the Board attended and for each committee meeting attended.
Pursuant to the Directors Option Plan adopted by the Company's Board on January
26, 1998, Messrs. Avram Glazer and Malcolm Glazer were automatically granted
options to purchase 568,200 and 14,200 shares of the Common Stock, respectively,
which options vest ratably over three years commencing on January 26, 1998 and
are exercisable at a price of $12.75 per share. Following the Offering, each new
non-employee director will upon joining the Board automatically be granted
options to purchase 14,200 shares of Common Stock at the fair market value
thereof, and which will vest ratably over three years from the date of the
grant. See 'Management -- Stock Option Plans.'
    
 
EXECUTIVE COMPENSATION
 
     The following table and accompanying footnotes provide summary information
concerning the compensation earned by the Company's current and former Chief
Executive Officer and the other executive officers of the Company whose salary
and bonus was in excess of $100,000 (the 'Named Officers') for Fiscal 1997:
 
                                       35
 

<PAGE>
<PAGE>

                           SUMMARY COMPENSATION TABLE
 
   
<TABLE>
<CAPTION>
                                                          ANNUAL COMPENSATION                   ALL OTHER
                                                ---------------------------------------       COMPENSATION
              NAME AND POSITION                 SALARY ($)    BONUS ($)    OTHER ($)(1)         ($)(2)(3)
- ---------------------------------------------   ----------    ---------    ------------    -------------------
<S>                                             <C>           <C>          <C>             <C>
Ronald Lassiter Former Chief Executive
  Officer and President(4)...................      --           73,600        705,633           --
 
Joseph Oliver Former Executive Vice
  President -- Finance and Development(5)....     105,608       33,120         64,283             3,126
 
Joseph L. von Rosenberg Chief Executive
  Officer and President(4)...................      --            --            --               --
 
Kelsey Short Senior Vice President --
  Marketing and Product Development..........      93,700       40,480         --                 3,430
</TABLE>
    
 
- ------------
 
(1) With respect to Mr. Lassiter represents payments made under a consulting
    agreement and with respect to Mr. Oliver represents a severance payment
    under his employment agreement.
 
(2) Pursuant to the Securities and Exchange Commission rules on executive
    compensation disclosure, 'All Other Compensation' does not include
    perquisites because the aggregate amount of such compensation for each of
    the persons listed did not exceed the lesser of (i) $50,000 or (ii) ten
    percent of the combined salary and bonus for such person in Fiscal 1997.
 
(3) Represents the Company's contribution pursuant to its profit sharing plan.
 
   
(4) Mr. Lassiter retired as Chief Executive Officer and President of the Company
    effective as of July 1997. Mr. von Rosenberg was elected Chief Executive
    Officer and President of the Company effective as of July 1997 and in Fiscal
    1997 received $50,000 in compensation for this position from Zapata where he
    continued to serve as Executive Vice President.
    
 
(5) Mr. Oliver left the Company's employ in July 1997.
 
EMPLOYMENT AGREEMENTS
 
   
     The Company intends to enter into employment agreements with Messrs. von
Rosenberg, Stockton, Short, Gilbert and Furey prior to completion of the
Offering. The agreements will require Messrs. von Rosenberg and Furey to resign
as officers of Zapata effective upon the closing of the Offering. These
agreements will provide for base salaries which are subject to review at least
annually, provided that they may not be decreased without the employee's
consent. The initial base salaries under the agreements are as follows for the
indicated executive: Mr. von Rosenberg -- $230,000; Mr. Stockton -- $155,000;
Mr. Short -- $132,500; Mr. Gilbert -- $132,500; and Mr. Furey $120,000. Under
Mr. von Rosenberg's agreement, he will also receive an annual bonus equal to
1.5% of the increase, if any, in the Company's earnings before income taxes,
depreciation and amortization over the prior Fiscal year. The agreements will
also provide for a severance payment equal to 2.99 times the employee's annual
base salary in effect immediately preceding the event of termination of his
employment with the Company (i) by the executive for Good Reason (as defined in
the employment agreement) (ii) by the Company without Cause (as defined in the
employment agreement) or (iii) following any change in control of the Company
(as defined in the employment agreement). The agreements will provide for
rolling three year terms.
    
 
   
ANNUAL INCENTIVE COMPENSATION PLAN
    
 
   
     The Company intends to establish an Annual Incentive Compensation Plan (the
'Bonus Plan') to provide bonuses to employees of the Company based on the
financial performance of the Company. The maximum bonus that will be awarded to
any participant will be 150% of that person's annual base salary.
    
 
RETIREMENT PLAN
 
     The Company maintains a defined benefit plan for its employees (the
'Pension Plan'). The table below shows the estimated annual benefits payable on
retirement under the Pension Plan to persons in the specified compensation and
years of service classifications. The retirement benefits shown are based
 
                                       36
 

<PAGE>
<PAGE>

   
upon retirement at age 65 and the payments of a single-life annuity to the
employee (although a participant can select other methods of calculating
benefits) to be received under the Company's Pension Plan using current average
Social Security wage base amounts and are not subject to any deduction for
Social Security or other offset amounts. With certain exceptions, the Internal
Revenue Code of 1986, as amended (the 'Code'), restricts to an aggregate amount
of $120,000 (subject to cost of living adjustments) the annual pension that may
be paid by an employer from a plan which is qualified under the Code. The Code
also limits the covered compensation which may be used to determine benefits to
$150,000.
    
 
                              RETIREMENT BENEFITS
 
<TABLE>
<CAPTION>
                                       YEARS OF SERVICE
    COVERED         -------------------------------------------------------
COMPENSATION(1)       15          20          25          30          35
- ---------------     -------     -------     -------     -------     -------
<S>                 <C>         <C>         <C>         <C>         <C>
   $ 125,000        $18,207     $24,277     $30,346     $36,415     $42,484
     150,000         22,332      29,777      37,221      44,665      52,109
     175,000         22,332      29,777      37,221      44,665      52,109
     200,000         22,332      29,777      37,221      44,665      52,109
     225,000         22,332      29,777      37,221      44,665      52,109
     250,000         22,332      29,777      37,221      44,665      52,109
     300,000         22,332      29,777      37,221      44,665      52,109
     400,000         22,332      29,777      37,221      44,665      52,109
     450,000         22,332      29,777      37,221      44,665      52,109
     500,000         22,322      29,777      37,221      44,665      52,109
</TABLE>
 
- ------------
 
(1) Represents the highest average annual earnings during five consecutive
    calendar years of service.
 
     Compensation of Named Officers covered by the Pension Plan includes
salaries and bonuses as shown in the salary and bonus columns of the Summary
Compensation Table. As of December 31, 1997, the approximate years of credited
service (rounded to the nearest year) under the Retirement Plan of the Named
Officers were as follows: Mr. von Rosenberg, 0, Mr. Lassiter, 0, Mr. Oliver, 9,
and Mr. Short, 12.
 
STOCK OPTION PLANS
 
1998 LONG-TERM INCENTIVE PLAN
 
     The 1998 Incentive Plan, approved by the Company's Board and Zapata as the
sole stockholder of the Company in January 1998, is intended to retain key
executives and other selected employees, reward them for making major
contributions to the Company's success and provide them with a proprietary
interest in the growth and performance of the Company and its subsidiaries.
 
     Employees who participate in the 1998 Incentive Plan will be selected by
the Company's Board (or a committee designated by the Company's Board) (the
'Committee') to make recommendations for grants under the 1998 Incentive Plan
from among those employees who hold positions of responsibility and whose
performance, in the judgement of the Committee, has a significant effect on the
Company's success.
 
     The total number of shares of Common Stock that may be issued pursuant to
the 1998 Incentive Plan will not exceed 3,600,000. Not more than 600,000 shares
of Common Stock are available for awards other than stock options and stock
appreciation rights granted at an exercise or strike price not less than fair
market value on the date of grant. The number of shares of Common Stock that may
be awarded pursuant to the 1998 Incentive Plan is subject to adjustment upon the
occurrence of certain events.
 
   
     The 1998 Incentive Plan provides for the grant of any or all of the
following types of awards: stock options, stock appreciation rights, stock
awards and cash awards. Stock options may be incentive stock options that comply
with Section 422 of the Code. The allocation of awards under the 1998 Incentive
    
 
                                       37
 

<PAGE>
<PAGE>

Plan is not currently determinable as such allocation is dependent upon future
decisions to be made by the Committee in its sole discretion, subject to the
applicable provisions of the 1998 Incentive Plan.
 
     The exercise price of any stock option may, at the discretion of the
Committee, be paid in cash or by surrendering shares of Common Stock or another
award under the 1998 Incentive Plan, valued at fair market value on the date of
exercise or any combination thereof. Vesting conditions for a stock option will
be specified by the Committee and set forth in the applicable option agreement.
Vesting conditions may include, without limitation, provision for acceleration
in the case of a change in control of the Company or for stock appreciation
rights exercisable for cash (in lieu of the option) in the case of such a change
in control of the Company.
 
     Stock appreciation rights are rights to receive, without payment to the
Company, cash or shares of Common Stock with a value determined by reference to
the difference between the exercise or 'strike' price of the stock appreciation
rights and the fair market value or other specified valuation of the Common
Stock at the time of exercise. Stock appreciation rights may be granted in
tandem with stock options or separately.
 
     Stock awards may consist of Common Stock or be denominated in units of
Common Stock. Stock awards may be subject to conditions established by the
Committee, including service, vesting conditions and performance conditions
(including without limitation performance conditions based on achievement of
specific business objectives, increases in specified indices and attaining
specified growth measures or rates). A stock award may provide for voting rights
and dividend equivalent rights.
 
     Cash awards may be subject to conditions specified by the Committee,
including service conditions and performance conditions.
 
     No participant may be granted during any three-year period, awards
consisting of stock options or stock appreciation rights exercisable for more
than 20% of the shares of Common Stock reserved for issuance under the 1998
Incentive Plan.
 
     Payment of awards may be made in cash or Common Stock or combinations
thereof, as determined by the Committee. An award may provide for the granting
or issuance of additional, replacement or alternative awards upon the occurrence
of specified events, including the exercise of the original award.
 
     An award may provide for a tax gross-up payment to a participant if a
change in control of the Company results in the participant owing an excise tax
or other tax above the rate ordinarily applicable, pursuant to the parachute tax
provisions of Section 280G of the Code or otherwise. The gross-up payment would
be in an amount such that the net amount received by the participant, after
paying the increased tax and any additional taxes on the additional amount,
would be equal to that receivable by the participant if the increased tax were
not applicable.
 
   
     Pursuant to the 1998 Incentive Plan, on January 26, 1998, the Company
granted options to purchase shares of Common Stock at an exercise price of
$12.75 per share to the following officers for the indicated number of shares:
Mr. von Rosenberg -- 568,200, Mr. Stockton -- 310,000, Mr. Short -- 250,000, Mr.
Gilbert -- 200,000 and Mr. Furey -- 116,160. These options vest ratably over a
three year period beginning on January 26, 1998, the date of the grant.
    
 
NON-MANAGEMENT DIRECTOR STOCK OPTION PLAN
 
     The Directors Option Plan, approved by the Company's Board and Zapata as
the sole stockholder of the Company in January 1998, is intended to provide
incentives to the directors of the Company who are not employees of the Company
by providing them with options to purchase shares of Common Stock. Options for
up to a maximum of 620,000 shares of Common Stock may be issued under the
Directors Option Plan.
 
     The Directors Option Plan provides that the initial Chairman of the Board
be granted an option to purchase up to 568,200 shares of Common Stock and each
other initial non-employee director of the Company will be granted options to
purchase 14,200 shares of the Common Stock at a price determined by the
Company's Board. All options granted under the Directors Option Plan vest
ratably over three years after the date of grant. Upon the occurrence of certain
events such as stock dividends and stock splits, consolidations or mergers, an
optionee's rights with respect to options granted are to be adjusted
 
                                       38
 

<PAGE>
<PAGE>

as provided in the Directors Option Plan. Any non-employee director joining the
Company's Board after the Offering will be granted an option to purchase up to
14,200 shares of Common Stock at an exercise price to be determined by the
Company's Board.
 
   
     Pursuant to the Directors Option Plan, the Company granted options on
January 26, 1998 to Messrs. Avram Glazer and Malcolm Glazer, to purchase 568,200
shares and 14,200 shares of Common Stock, respectively, at an exercise price of
$12.75 per share. All of these options vest ratably over the three year period
following the date of the grant.
    
 
                       PRINCIPAL AND SELLING STOCKHOLDERS
 
   
     The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock by (i) all executive officers and
directors of the Company as a group, (ii) each of the Named Officers, (iii) each
of the Company's directors, (iv) all persons known by the Company to
beneficially own more than 5% of the Company's Common Stock and (v) the Selling
Stockholder.
    
 
   
<TABLE>
<CAPTION>
                                                        SHARES BENEFICIALLY                      SHARES BENEFICIALLY
                                                               OWNED                                    OWNED
                                                       PRIOR TO OFFERING(1)     SHARES TO BE    AFTER THE OFFERING(1)
                                                       ---------------------    SOLD IN THE     ---------------------
NAME & ADDRESS                                           SHARES      PERCENT      OFFERING        SHARES      PERCENT
- ----------------------------------------------------   ----------    -------    ------------    ----------    -------
<S>                                                    <C>           <C>        <C>             <C>           <C>
Zapata Corporation(2) ..............................   19,676,000      100%       2,000,000     17,676,000      74.7%
  1717 St. James Place, Suite 550
  Houston, Texas 77210
Malcolm I. Glazer(2) ...............................   19,676,000      100%       2,000,000     17,676,000      74.7%
  1482 Ocean Boulevard
  Palm Beach, Florida 33480
Joseph L. von Rosenberg III ........................       --         --            --              --          --
Robert W. Stockton .................................       --         --            --              --          --
Kelsey D. Short, Jr. ...............................       --         --            --              --          --
Clyde R. Gilbert ...................................       --         --            --              --          --
Eric T. Furey ......................................       --         --            --              --          --
Avram A. Glazer ....................................       --         --            --              --          --
Ronald Lassiter ....................................       --         --            --              --          --
Joseph Oliver ......................................       --         --            --              --          --
All directors and executive officers as a group        19,676,000      100%       2,000,000     17,676,000      74.7%
  (consists of 8 persons)...........................
</TABLE>
    
 
- ------------
 
(1) Beneficial Ownership is determined in accordance with the rules of the
    Securities and Exchange Commission which generally attribute beneficial
    ownership of securities to persons who possess sole or shared voting power
    and/or investment power with respect to those securities.
 
(2) Prior to the Offering, all of the outstanding shares of Common Stock have
    been owned by Zapata. After the Offering, Zapata will own approximately
    74.7% (71.6% (17,376,000 shares) if the Underwriters' over-allotment options
    are exercised in full) of the Common Stock then outstanding. Zapata controls
    the Company. The Glazer Family Limited Partnership, a Nevada limited
    partnership ('Glazer Partnership'), owns beneficially and of record
    approximately 45% of Zapata's outstanding common stock. By virtue of such
    ownership, the Glazer Partnership may be deemed to control Zapata, and
    therefore may be deemed to beneficially own the Company's Common Stock owned
    beneficially by Zapata. The Glazer Partnership's sole partners are (i) MIG,
    Inc. a Nevada corporation, which is as a general partner and of which
    Malcolm Glazer is the sole officer, director and shareholder and (ii) the
    Malcolm Glazer Trust, a Florida trust, which is a limited partner, and of
    which Malcolm Glazer is the sole trustee and beneficiary during his
    lifetime.
 
                                       39


<PAGE>
<PAGE>

                     CERTAIN TRANSACTIONS AND ARRANGEMENTS
                         BETWEEN THE COMPANY AND ZAPATA
 
   
     Prior to the Offering, Zapata provided the Company with certain
administrative services, including treasury and tax services, which were billed
at their approximate costs to Zapata. During Fiscal 1995, 1996 and 1997 and
First Quarter Fiscal 1998, fees for these services totaled $34,500, $110,000,
$30,000 and $7,500, respectively. Prior to the Offering, the Company has
provided Zapata with payroll and certain administrative services, which were
billed to Zapata at their approximate costs to the Company. During Fiscal 1996
and 1997, these fees totaled $30,000 each year. The costs of these services were
directly charged and/or allocated using methods that the Company's management
believed were reasonable. Such charges and allocations are not necessarily
indicative of the amounts the Company would have received or paid for these
services had the Company been a separate entity. Neither the Company nor Zapata
has conducted any study or obtained any estimates from third parties to
determine what the Company would have received from or been paid to independent
third parties for such services.
    
   
     Prior to the Offering, Zapata advanced funds to the Company from time to
time. During Fiscal 1997, Zapata forgave the repayment of $41.9 million of
intercompany indebtedness owed to Zapata by the Company and the Company recorded
this amount as contributed capital. After forgiving such indebtedness, Zapata
advanced $28.1 million to the Company to meet the cash requirements of the
Recent Acquisitions and $5.2 million primarily for payment of the Company's
income taxes. As of December 31, 1997, Zapata had no outstanding guarantees of
Company indebtedness and the Company owed Zapata approximately $33.3 million of
intercompany debt. The intercompany balance attributable to the Recent
Acquisitions accrues interest at a rate equal to Zapata's cost of funds, which
is currently 8.5%; the balance of the Company's indebtedness to Zapata does not
bear any interest. Pursuant to the Separation Agreement described below, the
Company will repay $33.3 million of its intercompany indebtedness due Zapata at
the time of closing of the Offering with a portion of the net proceeds and the
remaining balance of intercompany indebtedness in the ordinary course. See 'Use
of Proceeds.'
    
     Prior to the consummation of the Offering, the Company and Zapata intend to
enter into a number of agreements for the purpose of defining their continuing
relationship. These agreements will be negotiated in the context of a
parent-subsidiary relationship and therefore will not be the result of
negotiations between independent parties. It is the intention of the Company and
Zapata that such agreements and the transactions provided for therein, taken as
a whole, should accommodate the parties' interests in a manner that is fair to
both parties, while continuing certain mutually beneficial arrangements. There
can be no assurance that each of such agreements, or the transactions provided
for therein, will be effected on terms at least as favorable to the Company as
could have been obtained from unaffiliated third parties.
 
     The following is a summary of certain agreements which the Company and
Zapata will enter into and which will become effective upon completion of the
Offering.
 
   
     Separation Agreement. The Separation Agreement provides for the Company and
Zapata to enter into a Sublease Agreement, a Registration Rights Agreement, a
Tax Indemnity Agreement and an Administrative Services Agreement. The Separation
Agreement will require the Company to repay the $33.3 million of intercompany
indebtedness owed by the Company to Zapata contemporaneously with the
consummation of the Offering. See 'Use of Proceeds.' The Separation Agreement
will also prohibit Zapata from engaging in the harvesting of menhaden or the
production or marketing of fish meal, fish oil or fish solubles anywhere in the
United States for a period of five years from the date of the Separation
Agreement. Under the Separation Agreement, Zapata and the Company and its
subsidiaries will indemnify each other with respect to any future losses that
might arise from the Offering as a result of any untrue statement or alleged
untrue statement in any Offering document or the omission or alleged omission to
state a material fact in any Offering document except to the extent such
statement was based on information provided by the party seeking
indemnification.
    
 
   
     Sublease Agreement. The Sublease between the Company and a subsidiary of
Zapata will provide for the Company to lease its principal corporate offices in
Houston, Texas, comprising approximately 3,354 square feet, at an annual rent of
approximately $36,204 and for a term that coincides with the remaining term of
the primary lease pursuant to which Zapata occupies the space which expires in
2000.
    
 
                                       40
 

<PAGE>
<PAGE>

     The Sublease will also provide for the Company to utilize certain shared
office equipment for no additional charge.
 
     Registration Rights Agreement. The Registration Rights Agreement provides
for the Company to grant certain rights (the 'Registration Rights') to Zapata
with respect to the registration under the Securities Act of the shares of
Common Stock owned by Zapata at the closing of the Offering (the 'Registrable
Securities'). Pursuant to the Registration Rights Agreement, Zapata will be able
to require the Company, not more than once in any 365 day period commencing on
the first anniversary of the closing of the Offering and on not more than three
occasions after Zapata no longer owns a majority of the voting power of the
outstanding capital stock of the Company, to file a registration statement under
the Securities Act covering the registration of the Registrable Securities,
including in connection with an offering by Zapata of its securities that are
exchangeable for the Registrable Securities (the 'Demand Registration Rights').
Zapata's Demand Registration Rights are subject to certain limitations,
including that any such registration cover a number of Registrable Securities
having a fair market value of at least $50.0 million at the time of the request
for registration and that the Company may be able to temporarily defer a Demand
Registration to the extent it conflicts with another public offering of
securities by the Company or would require the Company to disclose certain
material non-public information. Zapata will also be able to require the Company
to include Registrable Securities owned by Zapata in a registration by the
Company of its securities (the 'Piggyback Registration Rights'), subject to
certain conditions, including the ability of the underwriters for the offering
to limit or exclude Registrable Securities therefrom.
 
     The Company and Zapata will share equally the out-of-pocket fees and
expenses of the Company associated with a demand registration and Zapata will
pay its pro rata share of underwriting discounts, commissions and related
expenses (the 'Selling Expenses'). The Company will pay all expenses associated
with a piggyback registration, except that Zapata will pay its pro rata share of
the Selling Expenses. The Registration Rights Agreement contains certain
indemnification and contribution provisions (i) by Zapata for the benefit of the
Company and related persons, as well as any potential underwriter and (ii) by
the Company for the benefit of Zapata and related persons, as well as any
potential underwriter. Zapata's Demand Registration Rights will terminate on the
date that Zapata owns, on a fully converted or exercised basis with respect to
such securities held by Zapata, Registrable Securities representing less than
10% of the then issued and outstanding voting stock of the Company. Zapata's
Piggyback Registration Rights will terminate at such time as it is able to sell
all of its Registrable Securities pursuant to Rule 144 under the Securities Act
within a three month period. Zapata also may transfer its Registration Rights to
any transferee from it of Registrable Securities that represent, on a fully
converted or exercised basis with respect to the Registrable Securities
transferred, at least 20% of the then issued and outstanding voting stock of the
Company at the time of transfer; provided, however, that any such transferee
will be limited to (i) two demand registrations if the transfer conveys less
than a majority but more than 30% and (ii) one demand registration if the
transfer conveys 30% or less of the then issued and outstanding voting stock of
the Company.
 
   
     Tax Indemnity Agreement. Prior to the Offering, the Company has been a
member of Zapata's affiliated group and has filed its tax returns on a
consolidated basis with such group. After the Offering, the Company will no
longer be a member of the Zapata affiliated group. Prior to the consummation of
the Offering the Company and Zapata will enter into a Tax Indemnity Agreement to
define their respective rights and obligations relating to federal, state and
other taxes for periods before and after the Offering. Pursuant to the Tax
Indemnity Agreement, the Company will be required to pay Zapata (to the extent
not already paid) its share of federal income taxes prior to the date of
consummation of the Offering, and the Company shall be responsible for federal
income taxes from its operations on and after the date of consummation of the
Offering. Any subsequent refunds, additional taxes or penalties or other
adjustments relating to the Company's federal income taxes for periods prior to
the date of consummation of the Offering shall be borne by the entity to which
such adjustment relates. Similar provisions apply under the Tax Indemnity
Agreement to other taxes, such as state and local income taxes.
    
 
     Administrative Services Agreements. Zapata and the Company intend to enter
into an Administrative Services Agreement pursuant to which the Company will
provide Zapata with administrative
 
                                       41
 

<PAGE>
<PAGE>

services upon reasonable request of Zapata. Zapata will pay the Company for
these services at the Company's estimated cost of providing these services. This
Agreement will continue until Zapata terminates it on 5 days advance written
notice or the Company terminates it after Zapata fails to cure a breach of the
Agreement for 30 days after the Company has given Zapata written notice of the
breach.
 
                          DESCRIPTION OF CAPITAL STOCK
 
AUTHORIZED CAPITAL STOCK
 
     Immediately after the Offering, the Company's authorized capital stock will
consist of 10,000,000 shares of preferred stock, par value $.01 per share (the
'Preferred Stock'), and 80,000,000 shares of Common Stock. Immediately following
the Offering, 23,676,000 shares (24,276,000 shares if the Underwriters'
over-allotment options are exercised in full) of Common Stock will be
outstanding. All of the shares of Common Stock that will be outstanding
immediately following the Offering, including the shares of Common Stock sold in
the Offering, will be validly issued, fully paid and nonassessable.
 
COMMON STOCK
 
   
     The holders of Common Stock will be entitled to one vote for each share on
all matters voted on by stockholders, including elections of directors, and,
except as otherwise required by law or provided in any resolution adopted by the
Company's Board with respect to any series of Preferred Stock, the holders of
such shares will possess all voting power. The Company's Articles of
Incorporation (the 'Articles') do not provide for cumulative voting in the
election of directors. Subject to any preferential rights of any outstanding
series of Preferred Stock created by the Company's Board from time to time, the
holders of Common Stock will be entitled to such dividends as may be declared
from time to time by the Company's Board from funds available therefor, and upon
liquidation will be entitled to receive pro rata all assets of the Company
available for distribution to such holders. See 'Dividend Policy.'
    
 
PREFERRED STOCK
 
     The Company's Board has the authority to issue up to 10,000,000 shares of
Preferred Stock in one or more series and to fix the number of shares
constituting any such series and the preferences, limitations and relative
rights, including dividend rights, dividend rate, voting rights, terms of
redemption, redemption price or prices, conversion rights and liquidation
preferences of the shares constituting any series, without any further vote or
action by the Company's stockholders. The issuance of Preferred Stock by the
Company's Board could adversely affect the rights of holders of Common Stock.
The potential issuance of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of the Company, may discourage bids
for the Common Stock at a premium over the market price of the Common Stock and
may adversely affect the market price of, and the voting and other rights of the
holders of, the Common Stock. The Company has no current plans to issue any
shares of Preferred Stock.
 
FOREIGN OWNERSHIP RESTRICTIONS
 
   
     The Articles (i) contain provisions limiting the aggregate percentage
ownership by Non-Citizens of each class of the Company's capital stock to 49.99%
of the outstanding shares of each such class (the 'Permitted Percentage') to
ensure that such foreign ownership will not exceed the maximum percentage
permitted by applicable federal law (presently less than 50.00%), (ii) require
institution of a dual stock certificate system to help determine such ownership,
and (iii) permit the Company's Board to make such determinations as may
reasonably be necessary to ascertain such ownership and implement such
limitations. These provisions are intended to protect the ability of the
Company's vessels to conduct fishing operations in U.S. territorial waters and
the U.S. Exclusive Economic Zone. See 'Risk Factors -- Restriction on Foreign
Ownership' and 'Business -- Regulation.'
    
 
     To provide a method to enable the Company reasonably to determine stock
ownership by Non-Citizens, the Articles require the Company to institute (and to
implement through the transfer agent for the Common Stock) a dual stock
certificate system, pursuant to which certificates representing shares of
 
                                       42
 

<PAGE>
<PAGE>

Common Stock will bear legends that designate such certificates as either
'citizen' or 'non-citizen,' depending on the citizenship of the owner.
Accordingly, stock certificates are denominated as 'citizen' (blue) in respect
of Common Stock owned by Citizens and as 'non-citizen' (red) in respect of
Common Stock owned by Non-Citizens. The Company may also issue non-certificated
shares through depositories if the Company determines such depositories have
established procedures that allow the Company to monitor the ownership of Common
Stock by Non-Citizens.
 
     For purposes of the dual stock certificate system, a 'Non-Citizen' is
defined as any person other than a Citizen, and a 'Citizen' is defined as: (i)
any individual who is a citizen of the U.S. by birth, naturalization, or as
otherwise authorized by law; and (ii) any corporation, partnership, association,
limited liability company, joint venture (if not an association, corporation,
partnership or limited liability company) or other business organization which
is a citizen of the U.S. as determined by the Company's Board consistent with
the definition of U.S. Citizen as used in 46 C.F.R. 67.39(b)(2) and any
successor regulation or statute thereto as interpreted by the agencies of the
United States government charged with the administration of the Fishery License
Laws (defined below) or any court of law. The foregoing definition is applicable
at all tiers of ownership and in both form and substance at each tier of
ownership.
 
     Shares of Common Stock are transferable to Citizens at any time and are
transferable to Non-Citizens if, at the time of such transfer, the transfer
would not increase the aggregate ownership by Non-Citizens of the Common Stock
above the Permitted Percentage in relation to the total outstanding shares of
Common Stock or all voting stock. Non-Citizen certificates may be converted to
Citizen certificates upon a showing, satisfactory to the Company, that the
holder is a Citizen. Any purported transfer to Non-Citizens of shares or of an
interest in shares of the Company represented by a Citizen certificate in excess
of the Permitted Percentage will be ineffective as against the Company for all
purposes (including for purposes of voting, dividends, and any other
distribution, upon liquidation or otherwise). In addition, the shares may not be
transferred on the books of the Company, and the Company, whether or not such
stock certificate is validly issued, may refuse to recognize the holder thereof
as a stockholder of the Company except to the extent necessary to effect any
remedy available to the Company. Subject to the foregoing limitations, upon
surrender of any stock certificate for transfer, the transferee will receive
citizen (blue) certificates or non-citizen (red) certificates, as applicable.
 
   
     The Articles establish procedures with respect to the transfer of shares to
enforce the limitations referred to above and authorize the Company's Board to
implement such procedures. The Company's Board may take other ministerial
actions or make interpretations of the Company's foreign ownership policy as it
deems necessary in order to implement the policy. Under the Articles, the
Company's Board may require that as a condition precedent to each issuance
and/or transfer of stock certificates representing shares of Common Stock
(including the shares of Common Stock being sold in the Offering), a citizenship
certificate will be required from all transferees (and from any recipient upon
original issuance) of Common Stock and, with respect to the beneficial owner of
the Common Stock being transferred, if the transferee (or the original
recipient) is acting as a fiduciary or nominee for such beneficial owner. If
implemented, the registration of the transfer (or original issuance) will be
denied upon refusal to furnish such citizenship certificate, which will provide
information about the purported transferee's or beneficial owner's citizenship.
Furthermore, as part of the dual stock certificate system, depositories holding
shares of the Company's Common Stock will be required to maintain separate
accounts for 'Citizen' and 'Non-Citizen' shares. When the beneficial ownership
of such shares is transferred, the depositories' participants will be required
to advise such depositories as to which account the transferred shares should be
held. In addition, to the extent necessary to enable the Company to determine
the number of shares owned by Non-Citizens, the Company may from time to time
require record holders and beneficial owners of shares of Common Stock to
confirm their citizenship status and may, in the discretion of the Company's
Board, temporarily withhold dividends payable to, and deny voting rights to, any
such record holder or beneficial owner until confirmation of citizenship is
received.
    
 
     Should the Company (or its transfer agent for the Common Stock) become
aware that the ownership by Non-Citizens of Common Stock at any time exceeds the
Permitted Percentage (the
 
                                       43
 

<PAGE>
<PAGE>

   
'Excess Shares'), the Company's Board is authorized to withhold dividends and
other distributions temporarily on the Excess Shares, pending the transfer of
such shares to a Citizen or the reduction in the percentage of shares owned by
Non-Citizens to or below the Permitted Percentage, and to deny voting rights
with respect to the Excess Shares. If dividends and distributions are to be
withheld, they will be set aside for the account of the Excess Shares. At such
time as such shares are transferred to a Citizen or the ownership of such shares
by Non-Citizens will not result in aggregate ownership by Non-Citizens in excess
of the Permitted Percentage, the dividends withheld shall be paid to the then
record holders of the related shares. Excess Shares shall, so long as the excess
exists, not be deemed to be outstanding for purposes of determining the vote
required on any matter brought before the stockholders for a vote. The Articles
provide that the Company's Board has the power, in its reasonable discretion and
based upon the records maintained by the Company's transfer agent, to determine
those shares of Common Stock that constitute the Excess Shares. Such
determination will be made by reference to the date or dates on which such
shares were purchased by Non-Citizens, starting with the most recent acquisition
of shares by a Non-Citizen and including, in reverse chronological order, all
other acquisitions of shares by Non-Citizens from and after the acquisition that
first caused the Permitted Percentage to be exceeded; provided that Excess
Shares resulting from a determination that a record holder or beneficial owner
is no longer a Citizen will be deemed to have been acquired as of the date of
such determination. To satisfy the Permitted Percentage described above, the
Articles authorize the Company's Board, in its discretion, to redeem (upon
written notice) Excess Shares in order to reduce the aggregate ownership by
Non-Citizens to the Permitted Percentage. As long as the shares of Common Stock
offered hereby continue to be listed on the NYSE, the redemption price will be
the average of the closing sale price of the shares (as reported by the NYSE)
during the 30 trading days next preceding the date of the notice of redemption.
The redemption price for Excess Shares will be payable in cash.
    
 
ANTITAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND
BY-LAWS
 
BOARD OF DIRECTORS
 
     The Articles provide that except as otherwise fixed by or pursuant to the
provisions of a Certificate of Designations setting forth the rights of the
holders of any class or series of Preferred Stock, the number of the directors
of the Company will be fixed from time to time exclusively pursuant to a
resolution adopted by a majority of the total number of directors which the
Company would have if there were no vacancies (the 'Whole Board') (but shall not
be less than three). The directors, other than those who may be elected by the
holders of Preferred Stock, will be classified, with respect to the time for
which they severally hold office, into three classes, as nearly equal in number
as possible. The terms of the directors elected at the Company's 1998
stockholders' meeting expire at the annual meeting of stockholders to be held in
1999 for one class, the annual meeting of stockholders to be held in 2000 for
another class and at the annual meeting of stockholders to be held in 2001 for a
third class, with each director to hold office until its successor is duly
elected and qualified. Commencing with the 1999 annual meeting of stockholders,
directors elected to succeed directors whose terms then expire will be elected
for a term of office to expire at the third succeeding annual meeting of
stockholders after their election, with each director to hold office until such
person's successor is duly elected and qualified.
 
     The Articles provide that except as otherwise provided for or fixed by or
pursuant to a Certificate of Designation setting forth the rights of the holders
of any class or series of Preferred Stock, newly created directorships resulting
from any increase in the number of directors and any vacancies on the Company's
Board resulting from death, resignation, disqualification, removal or other
cause will be filled by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the Company's Board,
and not by the stockholders. Any director elected in accordance with the
preceding sentence will hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been duly elected and
qualified. No decrease in the number of directors constituting the Company's
Board will shorten the term of any incumbent director. Subject to the rights of
holders of Preferred Stock, any director may be removed from office only for
cause by the affirmative
 
                                       44
 

<PAGE>
<PAGE>

vote of the holders of at least 66 2/3% of the voting power of all voting stock
then outstanding, voting together as a single class.
 
     These provisions would preclude a third party from removing incumbent
directors and simultaneously gaining control of the Company's Board by filling
the vacancies created by removal with its own nominees. Under the classified
board provisions described above, it would take at least two elections of
directors for any individual or group to gain control of the Company's Board.
Accordingly, these provisions could discourage a third party from initiating a
proxy contest, making a tender offer or otherwise attempting to gain control of
the Company.
 
   
STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS
    
 
   
     The Articles and the Company's By-Laws provide that as of the time at which
Zapata and its affiliates cease to be the beneficial owner of an aggregate of at
least a majority of the then outstanding shares of Common Stock, any action
required or permitted to be taken by the stockholders of the Company must be
effected at a duly called annual or special meeting of such holders and may not
be effected by any consent in writing by such holders. Effective as of the date
that Zapata no longer has beneficial ownership of at least a majority of the
Company's outstanding Common Stock, except as otherwise required by law and
subject to the rights of the holders of any Preferred Stock, special meetings of
stockholders of the Company for any purpose or purposes may be called only by
the Company's Board pursuant to a resolution stating the purpose or purposes
thereof approved by a majority of the Whole Board or by the Chairman of the
Company's Board and, effective as of the date Zapata ceases to have beneficial
ownership of a majority of the outstanding Common Stock, any power of
stockholders to call a special meeting is specifically denied. No business other
than that stated in the notice shall be transacted at any special meeting. In
addition, prior to the date on which Zapata no longer holds at least a majority
of the Company's outstanding Common Stock, the Company will call a special
meeting of stockholders promptly upon request by Zapata, or any of its
affiliates, in each case, if such entity is a stockholder of the Company and
stockholder actions may be effected by written consent of the holders of the
amount of the voting stock required to approve such actions. These provisions
may have the effect of delaying consideration of a stockholder proposal until
the next annual meeting unless a special meeting is called by the Company's
Board or the Chairman of the Board.
    
 
ADVANCE NOTICE PROCEDURES
 
     The By-Laws establish an advance notice procedure for stockholders to make
nominations of candidates for election as directors or to bring other business
before an annual meeting of stockholders of the Company (the 'Stockholder Notice
Procedure'). The Stockholder Notice Procedure provides that only persons who are
nominated by, or at the direction of, the Chairman of the Board, or by a
stockholder who has given timely written notice to the Secretary of the Company
prior to the meeting at which directors are to be elected, will be eligible for
election as directors of the Company. The Stockholder Notice Procedure also
provides that at an annual meeting only such business may be conducted as has
been brought before the meeting by, or at the direction of, the Chairman of the
Board or the Company Board, or by a stockholder who has given timely written
notice to the Secretary of the Company of such stockholder's intention to bring
such business before such meeting. Under the Stockholder Notice Procedure, for
notice of stockholder nominations to be made at an annual meeting to be timely,
such notice must be received by the Company not later than the close of business
on the 60th calendar day nor earlier than the close of business on the 90th
calendar day prior to the first anniversary of the preceding year's annual
meeting (except that, in the event that the date of the annual meeting is more
than 30 calendar days before or more than 60 calendar days after such
anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the close of business on the 90th calendar day prior to such
annual meeting and not later than the close of business on the later of the 60th
calendar day prior to such annual meeting or the 10th calendar day following the
day on which public announcement of a meeting date is first made by the
Company).
 
     In addition, under the Stockholder Notice Procedure, a stockholder's notice
to the Company proposing to nominate a person for election as a director or
relating to the conduct of business other than the nomination of directors must
contain certain specified information. If the chairman of a
 
                                       45
 

<PAGE>
<PAGE>

meeting determines that an individual was not nominated, or other business was
not brought before the meeting, in accordance with the Stockholder Notice
Procedure, such individual will not be eligible for election as a director, or
such business will not be conducted at such meeting, as the case may be.
 
     The Stockholder Notice Procedure does not apply to Zapata and its
affiliates prior to the date on which Zapata no longer beneficially owns at
least a majority of the outstanding Common Stock.
 
AMENDMENTS
 
   
     The Articles provide that the affirmative vote of the holders of at least
66 2/3% of the Company's voting stock, voting together as a single class, is
required to amend provisions of the Articles relating to stockholder action
without a meeting; the calling of special meetings; the number, election and
term of the Company's directors; the filling of vacancies; and the removal of
directors. The Articles further provide that the related By-Laws described above
(including the Stockholder Notice Procedure) may be amended only by the
Company's Board or by the affirmative vote of the holders of at least 66 2/3% of
the voting power of the outstanding shares of voting stock, voting together as a
single class.
    
 
NEVADA ANTITAKEOVER LAWS AND CERTAIN CHARTER PROVISIONS
 
     Nevada's 'Business Combinations' statute, Nevada Revised Statutes
78.411-78.444, which applies to Nevada corporations having at least 200
stockholders which have not opted-out of the statute, prohibits an 'interested
stockholder' from entering into a'combination' with the corporation, unless
certain conditions are met. A 'combination' includes (a) any merger or
consolidation with an 'interested stockholder,' or any other corporation which
is or after the merger or consolidation would be, an affiliate or associate of
the interested stockholder, (b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of assets, in one transaction or a series of
transactions, to or with an 'interested stockholder,' having (i) an aggregate
market value equal to 5% or more of the aggregate market value of the
corporation's assets determined on a consolidated basis, (ii) an aggregate
market value equal to 5% or more of the aggregate market value of all
outstanding shares of the corporation or (iii) representing 10% or more of the
earning power or net income of the corporation determined on a consolidated
basis, (c) any issuance or transfer of shares of the corporation or its
subsidiaries, to the stockholders, having an aggregate market value equal to 5%
or more of the aggregate market value of all the outstanding shares of the
corporation, except under the exercise of warrants or rights to purchase shares
offered, or a dividend or distribution paid or made pro rata to all stockholders
of the corporation, (d) the adoption of any plan or proposal for the liquidation
or dissolution of the corporation proposed by or under any agreement,
arrangement or understanding, whether or not in writing, with the 'interested
stockholder,' (e) certain transactions which would have the effect of increasing
the proportionate share of outstanding shares of the corporation owned by the
'interested stockholder,' or (f) the receipt of benefits, except proportionately
as a stockholder, of any loans, advances or other financial benefits by an
'interested stockholder.' An 'interested stockholder' is a person who (i)
directly or indirectly beneficially owns 10% or more of the voting power of the
outstanding voting shares of the corporation or (ii) an affiliate or associate
of the corporation which at any time within three years before the date in
question was the beneficial owner, directly or indirectly, of 10% or more of the
voting power of the then outstanding shares of the corporation.
 
     A corporation to which the statute applies may not engage in a
'combination' within three years after the interested stockholder acquired its
shares, unless the combination or the interested stockholder's acquisition of
shares was approved by the board of directors before the interested stockholder
acquired the shares. If this approval was not obtained, then after the
three-year period expires, the combination may be consummated if all the
requirements in the corporation's articles of incorporation are met and either
(a)(i) the board of directors of the corporation approves, prior to the
'interested stockholder's' date of acquiring shares, or as to which the purchase
of shares by the 'interested stockholder' has been approved by the corporation's
board of directors before that date or (ii) the combination is approved by the
affirmative vote of holders of a majority of voting power not beneficially owned
by the 'interested stockholder' at a meeting called no earlier than three years
after the date the 'interested stockholder' became such or (b) the aggregate
amount of cash and the market value of consideration other than cash to be
received by holders of common shares and holders of any
 
                                       46
 

<PAGE>
<PAGE>

other class or series of shares meets the minimum requirements set forth in
Sections 78.411 through 78.443, inclusive, and prior to the consummation of the
combination, except in limited circumstances, the 'interested stockholder' will
not have become the beneficial owner of additional voting shares of the
corporation.
 
   
     Nevada law permits a Nevada corporation to 'opt out' of the application of
the 'Business Combinations' statute by inserting a provision doing so in its
original articles of incorporation. The Company's Articles has such a provision.
The Articles can be amended at any time to subject the Company to the effect of
the 'Business Combinations' statutes. Under Nevada law, the Articles may be
amended pursuant to a resolution adopted by the Company's Board and ratified by
a vote of a majority of the voting power of the Company's outstanding voting
stock.
    
 
     Nevada's 'Control Share Acquisition' statute, Nevada Revised Statute
78.378-78.3793, prohibits an acquiror, under certain circumstances, from voting
shares of a target corporation's stock after crossing certain threshold
ownership percentages, unless the acquiror obtains the approval of the target
corporation's stockholders. The statute specifies three thresholds: at least
one-fifth but less than one-third, at least one-third but less than a majority,
and a majority or more, of all the outstanding voting power. Once an acquiror
crosses one of the above thresholds, shares which it acquired in the transaction
taking it over the threshold or within ninety days become 'Control Shares' which
are deprived of the right to vote until a majority of the disinterested
stockholders restore that right. A special stockholders' meeting may be called
at the request of the acquiror to consider the voting rights of the acquiror's
shares no more than 50 days (unless the acquiror agrees to a later date) after
the delivery by the acquiror to the corporation of an information statement
which sets forth the range of voting power that the acquiror has acquired or
proposes to acquire and certain other information concerning the acquiror and
the proposed control share acquisition. If no such request for a stockholders'
meeting is made, consideration of the voting rights of the acquiror's shares
must be taken at the next special or annual stockholders' meeting. If the
stockholders fail to restore voting rights to the acquiror or if the acquiror
fails to timely deliver an information statement to the corporation, then the
corporation may, if so provided in its articles of incorporation or bylaws, call
certain of the acquiror's shares for redemption. The Company's By-laws provide
for such a redemption. The Control Share Acquisition statute also provides that
the stockholders who do not vote in favor of restoring voting rights to the
Control Shares may demand payment for the 'fair value' of their shares (which is
generally equal to the highest price paid in the transaction subjecting the
stockholder to the statute).
 
     The Control Share Acquisition statute only applies to Nevada corporations
with at least 200 stockholders, including at least 100 record stockholders who
are Nevada residents, and which do business directly or indirectly in Nevada.
While the Company does not currently exceed these thresholds, it may do so in
the future. The Company presently does not 'do business' in Nevada within the
meaning of the Control Share Acquisition Statute and it does not plan to do so.
Therefore, the Control Share Acquisition statute does not currently apply to the
Company.
 
     If the Business Combination statute and/or the Control Share Acquisition
statute become applicable to the Company in the future, the cumulative effect of
these terms may be to make it more difficult to acquire and exercise control of
the Company and to make changes in management more difficult.
 
LIABILITY OF DIRECTORS; INDEMNIFICATION
 
     The Company believes that certain provisions of its Articles and By-Laws
will be useful to attract and retain qualified persons as directors and
officers. The Company's Articles limit the liability of directors to the fullest
extent permitted by Nevada law. This is intended to allow the Company's
directors the benefit of Nevada Corporation Law which provides that directors of
Nevada corporations may be relieved of monetary liabilities for breach of their
fiduciary duties as directors, except under certain circumstances, including (i)
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the willful or grossly negligent payment of unlawful
distributions. The Company's Articles and By-Laws generally require the Company
to indemnify, its directors and officers to the fullest extent permitted by
Nevada law. The Articles and the Company's By-laws also require the Company to
advance expenses, to its directors and its officers to the fullest extent
permitted by Nevada
 
                                       47
 

<PAGE>
<PAGE>

   
law upon receipt of an undertaking by or on behalf of such director or officer
to repay such amount if it should be ultimately determined that they are not
entitled to indemnification by the Company. Prior to the consummation of the
Offering, the Company intends to enter into indemnification agreements with its
officers and directors which provides for the indemnification and advancement of
expenses by the Company. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. The Company intends to obtain, prior to the
completion of the Offering, officer and director liability insurance with
respect to liabilities arising out of certain matters, including matters arising
under the Securities Act. There is no pending litigation or proceeding involving
a director, officer, associate or other agent of the Company as to which
indemnification is being sought, nor is the Company aware of any threatened
litigation that may result in claims for indemnification by any director,
officer, associate or other agent.
    
 
TRANSFER AGENT AND REGISTRAR
 
     American Stock Transfer & Trust Company will be the transfer agent and
registrar for the Common Stock.
 
                                       48


<PAGE>
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Of the 23,676,000 shares of Common Stock to be outstanding as of the
closing of the Offering (24,276,000 shares if the Underwriters' over-allotment
options are exercised in full) the 6,000,000 shares of Common Stock sold in the
Offering (6,900,000 shares if the Underwriters exercise their over-allotment
options in full) will be freely tradable without restriction under the
Securities Act, except for any such shares which be may acquired by an affiliate
of the Company (an 'Affiliate'), as that term is defined in Rule 144 promulgated
under the Securities Act ('Rule 144'). The remaining 17,676,000 shares of Common
Stock outstanding upon the consummation of the Offering will be shares of Common
Stock held by Zapata and will be 'restricted securities,' as that term is
defined in Rule 144, that may be sold only if registered under the Securities
Act or in accordance with an applicable exemption from registration, such as
Rule 144.
 
     In general, under Rule 144 a person (or persons whose shares are
aggregated) who has beneficially owned shares for at least one year (including
the holding period of any prior owner except an affiliate from whom such shares
were purchased) is entitled to sell in 'brokers transactions' or to market
makers, within any three month period commencing 90 days after the date of this
Prospectus, a number of shares that does not exceed the greater of (i) one
percent of the number of shares of Common Stock then outstanding (236,760 shares
immediately after the completion of the Offering) or (ii) generally, the average
weekly trading volume in the Common Stock during the four calendar weeks
preceding the required filing of a Form 144 with respect to such sale. Sales
under Rule 144 are generally subject to the availability of current public
information about the Company. Under Rule 144(k), a person who is not deemed to
have been an affiliate of the Company at any time during the 90 days preceding a
sale, and who has beneficially owned the shares proposed to be sold for at least
two years (including the holding period of any prior owner other than an
affiliate from whom such shares were purchased), is entitled to sell such shares
without having to comply with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
 
     As discussed above, the shares of Common Stock which Zapata will continue
to hold after the Offering are 'restricted securities' as defined in Rule 144,
and may not be sold other than through registration under the Securities Act or
pursuant to an exemption from the regulations thereunder, including exceptions
provided by Rule 144. Pursuant to lock-up agreements, all of the Company's
officers and directors, the Selling Stockholder and the Company have agreed that
they will not, for a period of 180 days from the date of this Prospectus (360
days in the case of the Selling Stockholder), directly or indirectly, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any shares of Common Stock or other capital stock of the Company or any
securities convertible into, or exercisable or exchangeable for, any shares of
Common Stock, or other capital stock of the Company without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
except that such agreement does not prevent the Company from granting additional
options under the 1998 Incentive Plan or the Directors Option Plan. Prudential
Securities Incorporated may in its sole discretion, at any time and without
notice, release all or any portion of the securities subject to such lock-up
agreements.
 
     The Company intends to enter into a Registration Rights Agreement with the
Selling Stockholder, pursuant to which it grants the Selling Stockholder Demand
Registration Rights and Piggyback Registration Rights. See 'Certain Transactions
and Arrangements Between the Company and Zapata -- Registration Rights
Agreement.' The Selling Stockholder can exercise such rights any time one year
after the closing of the Offering to sell all of the Common Stock it holds or a
certain portion thereof until its beneficial ownership interest in the Company
falls below a certain level.
 
     The Company has granted options to certain officers of the Company for the
purchase of up to 1,657,360 shares of Common Stock pursuant to the 1998
Incentive Plan and options to the Company's non-management directors for the
purchase of 582,400 shares of Common Stock pursuant to the Directors Option
Plan, subject to certain restrictions. See 'Management -- Stock Option Plans.'
Within 365 days after the date of this Prospectus, the Company intends to file a
Registration Statement on Form S-8 covering an aggregate of approximately
4,220,000 shares of Common Stock (including the shares subject to outstanding
options) that have been reserved for issuance under its stock options and
 
                                       49
 

<PAGE>
<PAGE>

   
stock options plans for its officers and directors, thus permitting the resale
of such shares in the public market without restriction under the Securities
Act. Shares issued pursuant to these options and plans after the effective date
of such registration statement generally will be freely tradable without
restriction (other than shares issued to affiliates) or further registration
under the Securities Act.
    
 
     No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the
prevailing market price for the Common Stock. Sales of substantial amounts of
Common Stock, or the perception that such sale could occur, may adversely affect
prevailing market prices for the Common Stock and could impact the Company's
future ability to raise capital through an offering of equity securities.
 
                                       50
 

<PAGE>
<PAGE>

                                  UNDERWRITING
 
     The underwriters named below (the 'Underwriters'), for whom Prudential
Securities Incorporated and Deutsche Morgan Grenfell Inc. are acting as
representatives (the 'Representatives'), have severally agreed, subject to the
terms and conditions of the underwriting agreement (the 'Underwriting
Agreement') to purchase from the Company and the Selling Stockholder the
respective number of shares of Common Stock set forth opposite their respective
names below:
 
   
<TABLE>
<CAPTION>
                                                                                     NUMBER
UNDERWRITER                                                                         OF SHARES
- ---------------------------------------------------------------------------------   ---------
<S>                                                                                 <C>
Prudential Securities Incorporated...............................................
Deutsche Morgan Grenfell Inc.....................................................
 
                                                                                    ---------
Total............................................................................   6,000,000
                                                                                    ---------
                                                                                    ---------
</TABLE>
    
 
     The Company and the Selling Stockholder are obligated to sell, and the
Underwriters are obligated to purchase, all of the shares of Common Stock
offered hereby, if any are purchased.
 
     The Underwriters, through the Representatives, have advised the Company and
the Selling Stockholder that they propose to offer the Common Stock initially at
the public offering price set forth on the cover page of this Prospectus; that
the Underwriters may allow to selected dealers a concession of $      per share;
and that such dealers may reallow a concession of $      per share to certain
other dealers. After the Offering, the initial public offering price and the
concessions may be changed by the Representatives.
 
     The Company and the Selling Stockholder have granted the Underwriters
over-allotment options, exercisable for 30 days from the date of this
Prospectus, to purchase, in the aggregate, up to 900,000 additional shares of
Common Stock at the initial public offering price, less underwriting discounts
and commissions as set forth on the cover page of this Prospectus. Such
additional shares will be purchased from the Company and the Selling Stockholder
on a pro rata basis. The Underwriters may exercise such options solely for the
purpose of covering over-allotments incurred in the sale of the shares of Common
Stock offered hereby. To the extent such options to purchase are exercised, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number set
forth next to such Underwriters' name in the preceding table bears to 6,000,000.
 
     The Company and the Selling Stockholder have agreed to indemnify the
several Underwriters and contribute to losses arising out of certain
liabilities, including liabilities under the Securities Act.
 
     The Representatives have informed the Company and the Selling Stockholder
that the Underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.
 
     The Company, its officers and directors and the Selling Stockholder have
agreed not to, directly or indirectly, offer, sell, offer to sell, contract to
sell, pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other sale or disposition) of any shares of Common Stock
or other capital stock or any securities convertible into or exercisable or
exchangeable for any shares of Common Stock or other capital stock of the
Company, for a period of 180 days (360 days with respect to the Selling
Stockholder) from the date of this Prospectus without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, except for
shares offered pursuant to the Offering and issuances
 
                                       51
 

<PAGE>
<PAGE>

pursuant to options granted to employees or directors or pursuant to the
Company's stock option plans. Prudential Securities Incorporated may in its sole
discretion, any time and without notice, release all or any portion of the
securities subject to such lock-up agreement.
 
     Prior to the Offering, there has been no public market for the Common Stock
of the Company. Consequently, the initial public offering price will be
determined through negotiations between the Company, the Selling Stockholder and
the Representatives. Among the factors to be considered in making such
determination will be the prevailing market conditions, the Company's financial
and operating history and condition, its prospects and the prospects for its
industry in general, the management of the Company and the market prices of
securities for companies in businesses similar to that of the Company.
 
     In connection with the Offering, certain Underwriters (and selling group
members if any) and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the
Underwriters by selling more Common Stock in connection with the Offering than
they are committed to purchase from the Company and the Selling Stockholder, and
in such case may purchase Common Stock in the open market following the closing
of the Offering to cover all or a portion of such short position. The
Underwriters may also cover all or a portion of such short position, up to
900,000 shares of Common Stock, by exercising the Underwriters' over-allotment
options referred to above. In addition, Prudential Securities Incorporated, on
behalf of the Underwriters, may impose 'penalty bids' under contractual
arrangements with the Underwriters whereby it may reclaim from an Underwriter
(or dealer participating in the Offering) for the account of the other
Underwriters, the selling concession with respect to the Common Stock that is
distributed in the Offering but subsequently purchased for the account of the
Underwriters in the open market. Any of the transactions described in this
paragraph may result in the maintenance of the price of the Common Stock at the
level above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph is required, and, if they are
undertaken, they may be discontinued at any time.
 
                                 LEGAL MATTERS
 
   
     The validity of the issuance of the shares of Common Stock offered hereby
by the Company will be passed upon for the Company by Woods, Oviatt, Gilman,
Sturman & Clarke, LLP, Rochester, New York. Certain legal matters related to the
sale of the Common Stock will be passed upon for the Underwriters by Fulbright &
Jaworski L.L.P., New York, New York.
    
 
                                    EXPERTS
 
     The consolidated balance sheet as of September 30, 1997 and 1996, and the
consolidated statements of operations, stockholder's equity, and cash flows for
each of the three years in the period ended September 30, 1997, included in this
Prospectus and in the Registration Statement of which this Prospectus forms a
part, have been included herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in auditing and accounting.
 
                             AVAILABLE INFORMATION
 
     The Company has filed with the Commission a Registration Statement on Form
S-1 (together with all amendments, exhibits, schedules and supplements thereto,
the 'Registration Statement') under the Securities Act with respect to the
Common Stock offered hereby. This Prospectus, which forms a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made to
the Registration Statement. Statements contained in this Prospectus as to
 
                                       52
 

<PAGE>
<PAGE>

   
the contents of any contract, agreement or other document are not necessarily
complete, and, in each instance, reference is made to the copy of the document
filed as an exhibit to the Registration Statement. The Registration Statement
can be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549; and at the Commission's regional offices at Suite 1400, Northwest
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661, and 7 World
Trade Center (13th Floor), New York, New York 10048. Copies of such material can
also be obtained from the Commission at prescribed rates through its Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549 or accessed
through the Commissioner's internet web site at http://www.sec.gov.
Additionally, the Company intends to list the Common Stock sold in the Offering
on the NYSE and copies of materials filed by the Company with the NYSE can be
inspected and copied at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
    
 
     The Company is not currently subject to the informational requirements of
the Securities Exchange Act of 1934 (the '1934 Act'). As a result of the
Offering, the Company will become subject to the informational requirements of
the 1934 Act. The Company will fulfill its obligations with respect to such
requirements by filing periodic reports and other information with the
Commission. In addition, the Company intends to furnish to its stockholders
annual reports containing consolidated financial statements examined by an
independent public accounting firm.
 
                                       53
 

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<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
                         INDEX TO FINANCIAL STATEMENTS
 
   
<TABLE>
<CAPTION>
                                                                                                              PAGE
                                                                                                              ----
<S>                                                                                                           <C>
Report of Independent Accountants..........................................................................    F-2
Consolidated Balance Sheet, September 30, 1996 and 1997....................................................    F-3
Consolidated Statement of Operations, for the years ended September 30, 1995, 1996 and 1997................    F-4
Consolidated Statement of Stockholder's Equity, for the years ended September 30, 1995, 1996 and 1997......    F-5
Consolidated Statement of Cash Flows, for the years ended September 30, 1995, 1996 and 1997................    F-6
Notes to Consolidated Financial Statements.................................................................    F-7
Condensed Consolidated Balance Sheet, September 30, 1997 and December 31, 1997.............................   F-19
Condensed Consolidated Statement of Operations, for the three months ended December 31, 1996 and 1997......   F-20
Condensed Consolidated Statement of Cash Flows, for the three months ended December 31, 1996 and 1997......   F-21
Notes to Condensed Consolidated Financial Statements.......................................................   F-22
</TABLE>
    
 
                                      F-1


<PAGE>
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Stockholder and Board of Directors,
  OMEGA PROTEIN CORPORATION:
 
     We have audited the accompanying consolidated balance sheet of Omega
Protein Corporation (formerly Marine Genetics Corporation) as of September 30,
1997 and 1996, and the related consolidated statements of operations, cash flows
and stockholder's equity for each of the three years in the period ended
September 30, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Omega Protein
Corporation as of September 30, 1997 and 1996, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended September 30, 1997, in conformity with generally accepted accounting
principles.
 
                                          COOPERS & LYBRAND L.L.P.
 
   
Houston, Texas
December 11, 1997, except for Note 16,
as to which the date is January 26, 1998 and except
for Note 17, as to which the date is
February 16, 1998
    
 
                                      F-2


<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
                           CONSOLIDATED BALANCE SHEET
 
<TABLE>
<CAPTION>
                                                                                                 SEPTEMBER 30,
                                                                                              -------------------
                                                                                               1996        1997
                                                                                              -------    --------
                                                                                                (IN THOUSANDS,
                                                                                              EXCEPT FOR SHARES)
<S>                                                                                           <C>        <C>
                                          ASSETS
Current assets:
     Cash and cash equivalents.............................................................   $ 2,899    $  5,504
     Receivables, net......................................................................    10,521       9,936
     Inventories...........................................................................    29,919      38,448
     Prepaid expenses and other current assets.............................................       800         746
                                                                                              -------    --------
          Total current assets.............................................................    44,139      54,634
                                                                                              -------    --------
Other assets...............................................................................     6,319       4,917
                                                                                              -------    --------
Property and equipment, net................................................................    36,511      40,889
                                                                                              -------    --------
          Total assets.....................................................................   $86,969    $100,440
                                                                                              -------    --------
                                                                                              -------    --------
 
                           LIABILITIES AND STOCKHOLDER'S EQUITY
 
Current liabilities:
     Current maturities of long-term debt..................................................   $   487    $  1,034
     Accounts payable......................................................................     5,466       1,622
     Accrued liabilities...................................................................    14,741      15,423
     Amounts due to parent -- current......................................................     2,726       5,159
                                                                                              -------    --------
          Total current liabilities........................................................    23,420      23,238
                                                                                              -------    --------
Long-term debt.............................................................................     8,287      11,294
                                                                                              -------    --------
Deferred income taxes......................................................................       437       1,180
                                                                                              -------    --------
Other liabilities..........................................................................       896         374
                                                                                              -------    --------
Amounts due to parent -- noncurrent........................................................    41,900       --
                                                                                              -------    --------
Commitments and contingencies (Note 13)....................................................
Stockholder's equity:
     Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued...........     --          --
     Common stock, $.01 par value authorized; 80,000,000 shares; issued and outstanding:
      19,676,000 shares....................................................................       197         197
     Capital in excess of par value........................................................     1,831      43,731
     Reinvested earnings, from October 1, 1990.............................................    10,001      20,426
                                                                                              -------    --------
          Total stockholder's equity.......................................................    12,029      64,354
                                                                                              -------    --------
               Total liabilities and stockholder's equity..................................   $86,969    $100,440
                                                                                              -------    --------
                                                                                              -------    --------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-3


<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS
 
   
<TABLE>
<CAPTION>
                                                                              YEARS ENDED SEPTEMBER 30,
                                                                       ----------------------------------------
                                                                        1995            1996             1997
                                                                       -------         -------         --------
                                                                       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                                    <C>             <C>             <C>
Revenues                                                               $94,959         $93,609         $117,564
Cost of sales.......................................................    85,122          78,415           93,746
                                                                       -------         -------         --------
Gross profit........................................................     9,837          15,194           23,818
Selling, general and administrative.................................     3,933           4,690            5,613
                                                                       -------         -------         --------
Operating income....................................................     5,904          10,504           18,205
Interest expense, net...............................................    (1,102)           (995)            (592)
Other income (expense)..............................................       116            (118)          (1,328)
                                                                       -------         -------         --------
Income before income taxes..........................................     4,918           9,391           16,285
Provision for income taxes..........................................     1,668           3,463            5,860
                                                                       -------         -------         --------
Net income..........................................................   $ 3,250         $ 5,928         $ 10,425
                                                                       -------         -------         --------
                                                                       -------         -------         --------
Net income per share (basic)........................................   $  0.17         $  0.30         $   0.53
                                                                       -------         -------         --------
                                                                       -------         -------         --------
Average common shares outstanding...................................    19,676          19,676           19,676
                                                                       -------         -------         --------
                                                                       -------         -------         --------
Net income per share (diluted)......................................   $  0.17         $  0.30         $   0.53
                                                                       -------         -------         --------
                                                                       -------         -------         --------
Average common shares and common share equivalents outstanding......    19,676          19,676           19,676
                                                                       -------         -------         --------
                                                                       -------         -------         --------
</TABLE>
    
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-4
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
                 CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
 
<TABLE>
<CAPTION>
                                                                                           CAPITAL IN
                                                                                  COMMON    EXCESS OF    REINVESTED
                                                                                  STOCK     PAR VALUE     EARNINGS
                                                                                  ------    ---------    ----------
                                                                                           (IN THOUSANDS)
<S>                                                                               <C>       <C>          <C>
Balance at September 30, 1994..................................................    $197      $ 1,831       $   823
Net income.....................................................................    --          --            3,250
                                                                                  ------    ---------    ----------
Balance at September 30, 1995..................................................     197        1,831         4,073
Net income.....................................................................    --          --            5,928
                                                                                  ------    ---------    ----------
Balance at September 30, 1996..................................................     197        1,831        10,001
Net income.....................................................................    --          --           10,425
Capital contribution from parent...............................................    --         41,900        --
                                                                                  ------    ---------    ----------
Balance at September 30, 1997..................................................    $197      $43,731       $20,426
                                                                                  ------    ---------    ----------
                                                                                  ------    ---------    ----------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-5
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
 
   
<TABLE>
<CAPTION>
                                                                                       YEARS ENDED SEPTEMBER 30,
                                                                                     -----------------------------
                                                                                      1995       1996       1997
                                                                                     -------    -------    -------
                                                                                            (IN THOUSANDS)
<S>                                                                                  <C>        <C>        <C>
Cash flow provided by (used in) operating activities:
     Net income...................................................................   $ 3,250    $ 5,928    $10,425
     Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
       Loss (gain) on disposal of assets, net.....................................        (5)        42        483
       Depreciation, amortization and write-downs.................................     3,607      4,210      4,868
       Deferred taxes.............................................................       382        389        743
       Changes in assets and liabilities, net of the effect of disposition:
          Receivables.............................................................    (2,279)     3,762       (836)
          Inventories.............................................................    11,439     (3,614)    (9,291)
          Accounts payable and accrued liabilities................................    (5,638)     4,832        604
          Amounts due to parent...................................................   (11,249)     2,726      2,433
          Other, net..............................................................       375     (2,053)       624
                                                                                     -------    -------    -------
               Total adjustments..................................................    (3,368)    10,294       (372)
                                                                                     -------    -------    -------
               Net cash provided by (used in) operating activities................      (118)    16,222     10,053
                                                                                     -------    -------    -------
Cash flow provided by (used in) investing activities:
     Proceeds from sale of assets, net............................................       213        624       (771)
     Increase in note receivable..................................................      (450)     --          (334)
     Capital expenditures.........................................................    (6,652)    (4,673)    (9,825)
                                                                                     -------    -------    -------
               Net cash used in investing activities..............................    (6,889)    (4,049)   (10,930)
                                                                                     -------    -------    -------
Cash flow provided by (used in) financing activities:
     Bank overdraft...............................................................    (1,368)     --         --
     Borrowings...................................................................    10,020     11,100      4,061
     Payments on revolving line of credit.........................................     --       (21,100)     --
     Principal payments of debt obligations.......................................      (414)      (581)      (579)
                                                                                     -------    -------    -------
               Net cash provided by (used in) financing activities................     8,238    (10,581)     3,482
                                                                                     -------    -------    -------
Net increase in cash and cash equivalents.........................................     1,231      1,592      2,605
Cash and cash equivalents at beginning of period..................................        76      1,307      2,899
                                                                                     -------    -------    -------
Cash and cash equivalents at end of period........................................   $ 1,307    $ 2,899    $ 5,504
                                                                                     -------    -------    -------
                                                                                     -------    -------    -------
</TABLE>
    
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-6


<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1. SIGNIFICANT ACCOUNTING POLICIES
 
CONSOLIDATION
 
     The Company's predecessor, Marine Genetics Corporation, was incorporated in
Delaware on February 19, 1976. The Company is a wholly-owned subsidiary of
Zapata Corporation (and was formerly known as Zapata Protein, Inc.).
 
     The consolidated financial statements include the accounts of Omega Protein
Corporation and its wholly and majority owned subsidiaries (collectively, the
'Company'). Investments in affiliated companies and joint ventures representing
a 20% to 50% voting interest are accounted for using the equity method. All
significant intercompany accounts and transactions have been eliminated in
consolidation. The Company accounts for the results of its operations on a
fiscal year basis ending September 30.
 
BUSINESS DESCRIPTION
 
   
     The Company produces and markets a variety of products produced from
menhaden (a fish found in commercial quantities), including regular grade and
value added specialty fish meals, crude and refined fish oils and fish solubles.
The Company's fish meal products are used as nutritional feed additives by
animal feed manufacturers and by commercial livestock and poultry farmers. The
Company's refined fish oil products are sold to food producers in Europe and its
crude fish oil products are used in aquaculture feeds and certain industrial
applications. Fish solubles are sold as protein additives for animal feed and as
organic fertilizers.
    
 
REVENUE RECOGNITION
 
     The Company recognizes revenue when title to its products is transferred to
the customer.
 
INVENTORIES
 
    
 
     Fish product inventories are stated at the lower of cost or market.
Materials, parts and supplies are stated at average cost.
 
     The Company's fishing season runs from mid-April to the end of October 
for the Gulf Goast and runs from the beginning of May to the end of December 
for the Atlantic Coast. Government regulations preclude the Company from 
fishing during the off seasons. During the off seasons, the Company incurs 
costs (i.e. plant and vessel related labor, utilities, rent and depreciation) 
that are directly related to the Company's infrastructure that will be used in 
the upcoming fishing season. Costs that are incurred subsequent to a fish catch 
are deferred until the next season and are included within inventory. 
 
     The Company's inventory cost system considers all costs, both variable and 
fixed, associated with an annual fish catch and its processing. The Company's 
costing system allocates cost to inventory quantities on a per unit basis as 
calculated by a formula that considers total estimated costs for a fishing 
season (including off season costs) to total estimated fish catch. 
     

 
INCOME TAXES
 
     The Company utilizes the liability method to account for income taxes. This
method requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of existing temporary differences between the
financial reporting and tax reporting basis of assets and liabilities, and
operating loss and tax credit carryforwards for tax purposes. The Company is
included in Zapata Corporation's consolidated U.S. federal income tax return and
its income tax effects are reflected on a separate return basis for financial
reporting purposes.
 
PROPERTY, EQUIPMENT AND DEPRECIATION
 
     Depreciation of property and equipment is computed by the straight-line
method at rates expected to amortize the cost of property and equipment, net of
salvage value, over their estimated useful lives. Estimated useful lives of
assets acquired new, determined as of the date of acquisition are as follows:
 
<TABLE>
<CAPTION>
                                                                                   USEFUL LIVES
                                                                                     (YEARS)
                                                                                   ------------
<S>                                                                                <C>
Fishing vessels and fish processing plants......................................       15 - 20
Furniture and fixtures..........................................................        3 - 10
</TABLE>
 
                                      F-7
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Replacements and major improvements are capitalized; maintenance and
repairs are charged to expense as incurred. Upon sale or retirement, the costs
and related accumulated depreciation are eliminated from the accounts. Any
resulting gains or losses are included in the statement of operations. The
Company periodically evaluates its long-lived assets for impairment if events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.
 
CONCENTRATIONS OF CREDIT RISK
 
     Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and trade accounts
receivable. The Company's customer base generally remains consistent from year
to year and procedures are in effect to monitor the creditworthiness of these
customers.
 
     At September 30, 1996 and 1997, the Company had cash deposits concentrated
primarily in one major bank. The Company believes that credit risk in such
deposits is minimal.
 
INVESTMENT IN VENTURE MILLING COMPANY
 
     In August 1993, the Company acquired a 60% equity interest in Venture
Milling Company ('Venture'), a Delaware corporation involved in the milling of
animal feeds and protein-ingredient products for the poultry, hog and dairy
industries. In March 1996, the Company acquired the remaining 40% of Venture's
equity. Venture leased and operated a feed mill in Seaford, Delaware. The
Company consolidated the financial results of Venture. The Company's net income
for the 1995, 1996 and 1997 fiscal years was not materially impacted by activity
related to Venture. The Company sold Venture in fiscal 1997 and recognized a
loss of $531,000, which is recorded in other expense.
 
USE OF ESTIMATES
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
   
QUASI-REORGANIZATION
    
 
     In connection with the comprehensive restructuring accomplished in fiscal
1991, the Company, in conjunction with Zapata Corporation, implemented, for
accounting purposes, a 'quasi-reorganization,' an elective accounting procedure
that permits a company that has emerged from previous financial difficulty to
restate its accounts and establish a fresh start in an accounting sense. After
implementation of the accounting quasi-reorganization, the Company's assets and
liabilities were revalued at their estimated fair value and its deficit in
reinvested earnings was charged to capital in excess of par value. The Company
effected the accounting quasi-reorganization as of October 1, 1990.
 
RECLASSIFICATIONS
 
     Reclassifications of prior years information have been made to conform with
the current year presentation. These reclassifications had no effect on net
income or total assets.
 
ACCOUNTING FOR STOCK OPTIONS
 
     In October 1995, the Financial Accounting Standards Board ('FASB') issued
Statement of Financial Accounting Standards No. 123, 'Accounting for Stock Based
Compensation' ('SFAS 123'), which sets forth accounting and disclosure
requirements for stock option and other stock-based
 
                                      F-8
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
compensation plans. The new statement encourages, but does not require,
companies to record stock-based compensation expense using the fair-value
method, rather than the intrinsic-value method prescribed by Accounting
Principles Board ('APB') Opinion No. 25 ('APB 25'). The Company intends to adopt
only the disclosure requirements of SFAS 123 and to record stock-based
compensation expense using the intrinsic-value approach prescribed by APB 25.
Accordingly, the Company will compute compensation cost as the amount by which
the fair market price of the Company's common stock exceeds the exercise price
on the date of grant. The amount of compensation cost, if any, would be charged
to income over the vesting period.
 
RECENTLY ISSUED ACCOUNTING STANDARDS
 
   
     In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, 'Earnings Per Share' ('SFAS 128') which established standards
for computing and presenting earnings per share. SFAS 128 is effective for
periods ending after December 15, 1997, including interim periods. The Company
does not expect that adoption of SFAS 128 will have a significant effect on the
Company's earnings per share. Early adoption is not permitted. (See Note 17).
    
 
   
     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, 'Reporting Comprehensive Income' ('SFAS 130') which is effective for
fiscal years beginning after December 15, 1997. SFAS 130 establishes standards
for reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. It requires (a) classification of items of other comprehensive
income by their nature in a financial statement and (b) display of the
accumulated balance of other comprehensive income separate from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. SFAS 130 is effective for both interim and annual periods
beginning after December 15, 1997.
    
 
     In June 1997, the FASB also issued Statement of Financial Accounting
Standards No. 131, 'Disclosure about Segments of an Enterprise and Related
Information' ('SFAS 131') which is effective for periods beginning after
December 15, 1997. The disclosures will be required beginning in the Company's
fiscal 1999 annual report. SFAS 131 establishes standards for reporting
information about operating segments in annual financial statements and requires
selected information about operating segments in interim financial reports
issued to shareholders. It also establishes standards for related disclosures
about products and services, geographic areas and major customers. This
Statement supersedes Statement of Financial Accounting Standards No. 14,
'Financial Reporting for Segments of a Business Enterprise', but retains the
requirement to report information about major customers.
 
2. ACCOUNTS RECEIVABLE
 
     Accounts receivable as of September 30, 1996 and 1997 are summarized as
follows:
 
<TABLE>
<CAPTION>
                                                                            1996       1997
                                                                           -------    -------
                                                                             (IN THOUSANDS)
<S>                                                                        <C>        <C>
Trade...................................................................   $ 9,606    $ 8,821
Insurance...............................................................       811        795
Employee................................................................        64         95
Other...................................................................       201        401
                                                                           -------    -------
                                                                            10,682     10,112
Less allowance for doubtful accounts....................................      (161)      (176)
                                                                           -------    -------
                                                                           $10,521    $ 9,936
                                                                           -------    -------
                                                                           -------    -------
</TABLE>
 
                                      F-9
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
3. INVENTORY
 
     Inventory as of September 30, 1996 and 1997 is summarized as follows:
 
   
<TABLE>
<CAPTION>
                                                                            1996       1997
                                                                           -------    -------
                                                                             (IN THOUSANDS)
<S>                                                                        <C>        <C>
Fish meal...............................................................   $15,311    $19,048
Crude fish oil..........................................................     4,711     11,188
Other fish oil..........................................................     1,507      1,558
Fish solubles...........................................................     1,434        983
Off-season costs (see Note 1)............................................    2,533      2,420
Materials and supplies..................................................     3,508      3,353
Other...................................................................     1,017      --
                                                                           -------    -------
                                                                            30,021     38,550
Less oil inventory reserve..............................................      (102)      (102)
                                                                           -------    -------
                                                                           $29,919    $38,448
                                                                           -------    -------
                                                                           -------    -------
</TABLE>
    
 

4. OTHER ASSETS
 
     Other assets as of September 30, 1996 and 1997 are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                               1996      1997
                                                                              ------    ------
                                                                               (IN THOUSANDS)
<S>                                                                           <C>       <C>
Fishing nets...............................................................   $1,201    $1,309
Qualified pension plan.....................................................    2,629     2,588
Title XI loan origination fee..............................................      370       359
Property held for resale...................................................      304       304
Deposits...................................................................      373       116
Investments in unconsolidated affiliates...................................      516       188
Miscellaneous..............................................................      926        53
                                                                              ------    ------
                                                                              $6,319    $4,917
                                                                              ------    ------
                                                                              ------    ------
</TABLE>
 
     Amortization expense for fishing nets amounted to $971,000, $1.0 million
and $965,000 for the years ended September 30, 1995, 1996 and 1997,
respectively.
 

5. PROPERTY AND EQUIPMENT
 
     Property and equipment as of September 30, 1996 and 1997 are summarized as
follows:
 
<TABLE>
<CAPTION>
                                                                           1996        1997
                                                                         --------    --------
                                                                            (IN THOUSANDS)
<S>                                                                      <C>         <C>
Land..................................................................   $  3,861    $  3,967
Plant.................................................................     36,852      38,310
Fishing vessels.......................................................     26,718      30,101
Furniture and fixtures................................................      1,421       1,692
Other.................................................................        447       2,304
                                                                         --------    --------
                                                                           69,299      76,374
Less accumulated depreciation and impairment..........................    (32,788)    (35,485)
                                                                         --------    --------
                                                                         $ 36,511    $ 40,889
                                                                         --------    --------
                                                                         --------    --------
</TABLE>
 
   
     Depreciation expense for the years ended September 30, 1995, 1996 and 1997
was $2.6 million, $3.2 million and $3.6 million, respectively.
    
 
                                      F-10
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
6. LONG-TERM DEBT
 
     At September 30, 1996 and 1997, the Company's long-term debt consisted of
the following:
 
<TABLE>
<CAPTION>
                                                                                     1996        1997
                                                                                   --------    --------
                                                                                      (IN THOUSANDS)
<S>                                                                                <C>         <C>
U.S. government guaranteed obligations collateralized by a first lien on certain
  fishing vessels and certain plant assets:
     Amounts due in installments through 2011, interest from 6.63% to 7.17%.....   $  7,267    $  8,678
     Amounts due in installments through 2014, interest at Eurodollar rates plus
       .45%; 6.08% and 6.17% at September 30, 1996 and 1997, respectively.......      1,429       1,350
Term note due 2002, interest at prime (8.5% at September 30, 1997)
  collateralized by certain assets of the Company...............................      --          2,175
Other debt at 5.6% and 4% at September 30, 1996 and 1997, respectively..........         78         125
                                                                                   --------    --------
          Total.................................................................      8,774      12,328
               Less current maturities..........................................        487       1,034
                                                                                   --------    --------
Long-term debt..................................................................   $  8,287    $ 11,294
                                                                                   --------    --------
                                                                                   --------    --------
</TABLE>
 
     The fair value of the Company's debt obligations are estimated based on the
current rates offered to the Company for the debt of the same remaining
maturities. At September 30, 1996 and 1997, the estimated fair value of debt
obligations approximated book value.
 
     In 1995, the Company entered into a loan agreement with Internationale
Nederlanden (U.S.) Capital Corporation ('ING Loan Agreement'). The ING Loan
Agreement provided the Company with a $15 million revolving credit facility that
was due June 30, 1997. The ING Loan Agreement was terminated in fiscal 1997.
 
ANNUAL MATURITIES
 
     The annual maturities of long-term debt for the five years ending September
30, 2002 are as follows (in thousands):
 
<TABLE>
<CAPTION>
 1998       1999       2000       2001       2002
- ------     ------     ------     ------     ------
<S>        <C>        <C>        <C>        <C>
$1,034     $1,061     $1,092     $1,136     $1,108
</TABLE>
 
7. CASH FLOW INFORMATION
 
     The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
 
     Net cash provided by operating activities reflects cash payments of
interest and income taxes.
 
<TABLE>
<CAPTION>
                                                                        1995    1996     1997
                                                                        ----    ----    ------
                                                                            (IN THOUSANDS)
<S>                                                                     <C>     <C>     <C>
Cash paid during the fiscal year for:
     Interest........................................................   $967    $950    $  560
     Income tax......................................................    116     365     2,851
</TABLE>
 
     During fiscal 1995, the Company exchanged certain other assets held for
sale for property and equipment and also exercised an option to purchase certain
real estate resulting in the reclassification of a deposit from other assets to
property and equipment. These transactions resulted in the reclassification of
approximately $2.0 million from other assets to property and equipment.
 
                                      F-11
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
8. INCOME TAXES
 
     The Company's provision for income tax expense consisted of the following:
 
<TABLE>
<CAPTION>
                                                                     1995      1996      1997
                                                                    ------    ------    ------
                                                                          (IN THOUSANDS)
<S>                                                                 <C>       <C>       <C>
Current:
     State.......................................................   $  241    $  348    $  489
     U.S.........................................................    1,045     2,726     4,628
Deferred:
     State.......................................................     (300)     --        --
     U.S.........................................................      682       389       743
                                                                    ------    ------    ------
                                                                    $1,668    $3,463    $5,860
                                                                    ------    ------    ------
                                                                    ------    ------    ------
</TABLE>
 
     As of September 30, 1997, for federal income tax purposes, the Company has
approximately $610,000 of investment tax credit carryforwards expiring in 1999
through 2001, and has approximately $194,000 of alternative minimum tax credit
carryforwards. Investment tax credit carryforwards are reflected in the balance
sheet as a reduction of deferred taxes using the flow through method.
 
     The following table reconciles the income tax provisions computed using the
U.S. statutory rate of 34% in 1995 and 1996 and 35% in 1997 to the provisions
reflected in the financial statements.
 
<TABLE>
<CAPTION>
                                                                     1995      1996      1997
                                                                    ------    ------    ------
                                                                          (IN THOUSANDS)
<S>                                                                 <C>       <C>       <C>
Taxes at statutory rate..........................................   $1,672    $3,193    $5,700
Other............................................................       35        40      (158)
State taxes, net of federal benefit..............................      (39)      230       318
                                                                    ------    ------    ------
                                                                    $1,668    $3,463    $5,860
                                                                    ------    ------    ------
                                                                    ------    ------    ------
</TABLE>
 
     Temporary differences and tax credit carryforwards that gave rise to
significant portions of deferred tax assets and liabilities as of September 30,
1996 and 1997 are as follows:
 
<TABLE>
<CAPTION>
                                                                             1996       1997
                                                                            -------    -------
                                                                              (IN THOUSANDS)
<S>                                                                         <C>        <C>
Deferred tax assets:
     Asset write-downs and accruals not yet deductible...................   $ 1,593    $ 1,221
     Investment tax credit carryforwards.................................       632        610
     Alternative minimum tax credit carryforwards........................       194        194
     Equity in loss of unconsolidated affiliates                              --           146
     Other...............................................................       272        367
                                                                            -------    -------
          Total deferred tax assets......................................     2,691      2,538
                                                                            -------    -------
Deferred tax liabilities:
     Property and equipment..............................................    (2,135)    (2,738)
     Pension.............................................................      (893)      (880)
     Other...............................................................      (100)      (100)
                                                                            -------    -------
          Total deferred tax liabilities.................................    (3,128)    (3,718)
                                                                            -------    -------
          Net deferred tax liability.....................................   $  (437)   $(1,180)
                                                                            -------    -------
                                                                            -------    -------
</TABLE>
 
                                      F-12
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
9. ACCRUED LIABILITIES
 
     Accrued liabilities as of September 30, 1996 and 1997 are summarized as
follows:
 
<TABLE>
<CAPTION>
                                                                            1996       1997
                                                                           -------    -------
                                                                             (IN THOUSANDS)
<S>                                                                        <C>        <C>
Salary and benefits.....................................................   $ 6,481    $ 6,454
Insurance...............................................................     4,806      3,618
Trade creditors.........................................................     2,224      2,707
Other...................................................................     1,230      2,644
                                                                           -------    -------
                                                                           $14,741    $15,423
                                                                           -------    -------
                                                                           -------    -------
</TABLE>
 
10. EMPLOYEE'S PROFIT SHARING PLAN
 
     All qualified employees of the Company are covered under the Zapata
Profit-Sharing Plan. The Company contributes matching and profit-sharing
contributions to the plan based on employee contributions and compensation.
Contributions to the plan totaled $638,000, $456,000 and $488,000 in 1995, 1996
and 1997, respectively.
 
11. PENSION PLAN
 
     The Company has a pension plan covering substantially all U.S. employees.
Plan benefits are generally based on employees' years of service and
compensation level. The plan has adopted an excess benefit formula integrated
with covered compensation. Participants are 100% vested in the accrued benefit
after five years of service.
 
     Net pension cost (credit) for 1996 and 1997 included the following
components:
 
<TABLE>
<CAPTION>
                                                                             1996       1997
                                                                            -------    -------
                                                                              (IN THOUSANDS)
<S>                                                                         <C>        <C>
Service cost-benefits earned during the year.............................   $   554    $   612
Interest cost on projected benefit obligations...........................     1,249      1,327
Actual gain on plan assets...............................................    (1,598)    (1,707)
Amortization of transition asset and other deferrals.....................      (303)      (191)
                                                                            -------    -------
     Net pension cost (credit)...........................................   $   (98)   $    41
                                                                            -------    -------
                                                                            -------    -------
</TABLE>
 
                                      F-13
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The Company's funding policy is to make contributions as required by
applicable regulations. No contributions to the plan have been required since
1984. The plan's funded status and amounts recognized in the Company's balance
sheet at September 30, 1996 and 1997, are presented below:
 
<TABLE>
<CAPTION>
                                                                                      1996       1997
                                                                                     -------    -------
                                                                                       (IN THOUSANDS)
<S>                                                                                  <C>        <C>
Fair value of plan assets.........................................................   $19,538    $21,707
                                                                                     -------    -------
Actuarial present value of benefit obligations
     Vested benefits..............................................................    15,865     16,252
     Nonvested benefits...........................................................       440        339
                                                                                     -------    -------
     Accumulated benefit obligation...............................................    16,305     16,591
     Additional benefits based on projected salary increases......................     1,952      1,881
                                                                                     -------    -------
     Projected benefit obligations................................................    18,257     18,472
                                                                                     -------    -------
Excess of plan assets over projected benefit obligations..........................     1,281      3,235
Unrecognized transition asset.....................................................    (2,078)    (1,732)
Unrecognized prior service cost...................................................        86         60
Unrecognized net loss.............................................................     3,340      1,025
                                                                                     -------    -------
Prepaid pension cost..............................................................   $ 2,629    $ 2,588
                                                                                     -------    -------
                                                                                     -------    -------
</TABLE>
 
     The unrecognized transition asset at October 1, 1987, was $5.2 million
which is being amortized over 15 years. For 1996 and 1997, the actuarial present
value of the projected benefit obligation was based on a 4.75% weighted-average
annual increase in salary levels and a 7.5% discount rate. Pension plan assets
are invested in cash, common and preferred stocks, short term investments and
insurance contracts. The projected long-term rate of return on plan assets was
9.0% in 1996 and 1997. The unrecognized net loss of $1.0 million at September
30, 1997 is expected to be reduced by future returns on plan assets and through
decreases in future net pension credits.
 
12. RELATED-PARTY TRANSACTIONS
 
     Certain administrative services, including treasury and taxation services,
are provided to the Company by Zapata Corporation and billed at their
approximate cost. During fiscal 1995, 1996 and 1997, fees for these services
totaled $35,000, $110,000 and $30,000, respectively. The Company provides to
Zapata Corporation payroll and certain administrative services billed at their
approximate cost. During fiscal 1996 and 1997, fees for these services totaled
$30,000 in each year.
 
     The amounts due to parent-current consists primarily of the Company's
portion of income taxes.
 
     At September 30, 1997, the Company held receivables which totaled $334,000
from an entity in which it has an equity interest.
 
     During 1997, Zapata Corporation forgave the repayment of $41.9 million and
the Company recorded the amount as contributed capital.
 
   
     Average balances due to Zapata were:
    
 
   
<TABLE>
<CAPTION>
                                                                 1995       1996       1997
                                                                -------    -------    -------
<S>                                                             <C>        <C>        <C>
Amounts due to parent........................................   $47,525    $43,263    $24,893
</TABLE>
    
 
                                      F-14
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
   
     The following represents the intercompany activity for the three year
period ended September 30, 1997:
    
 
   
<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 30,
                                                                         ------------------------------
                                                                          1995        1996       1997
                                                                         -------    --------    -------
                                                                                 (IN THOUSANDS)
<S>                                                                      <C>        <C>         <C>
Beginning balance.....................................................   $53,149    $ 41,900    $44,626
Income taxes payable to parent........................................     1,668       3,463      5,860
Administrative services provided by parent............................        35         110         30
Administrative services provided by the Company.......................     --            (30)       (30)
Payments to parent....................................................   (12,952)       (817)    (3,427)
Capital contribution from parent......................................     --          --       (41,900)
                                                                         -------    --------    -------
Ending balance........................................................   $41,900    $ 44,626    $ 5,159
                                                                         -------    --------    -------
                                                                         -------    --------    -------
 
Amounts due to parent -- current......................................   $ --       $  2,726    $ 5,159
Amounts due to parent -- non-current..................................    41,900      41,900      --
                                                                         -------    --------    -------
     Total............................................................   $41,900    $ 44,626    $ 5,159
                                                                         -------    --------    -------
                                                                         -------    --------    -------
</TABLE>
    
 
13. COMMITMENTS AND CONTINGENCIES
 
OPERATING LEASE PAYABLE
 
     Future minimum payments under non-cancelable operating lease obligations
aggregate $1.5 million, and for the five years ending September 30, 2002 are (in
thousands):
 
<TABLE>
<CAPTION>
1998       1999       2000       2001       2002
- ----       ----       ----       ----       ----
<S>        <C>        <C>        <C>        <C>
$448       $451       $451       $199        $0
</TABLE>
 
     Rental expense for operating leases was $1.4 million, $406,000 and $754,000
in 1995, 1996 and 1997, respectively.
 
LITIGATION
 
   
     The Company is defending various claims and litigation arising from its
operations. In the opinion of management, any losses resulting from these
matters will not have a material adverse effect on the Company's results of
operations, cash flows or financial position.
    
 
ENVIRONMENTAL MATTERS
 
     The Company is subject to various possible claims and lawsuits regarding
environmental matters. Management believes that costs, if any, related to these
matters will not have a material adverse effect on the results of operations,
cash flows or financial position of the Company.
 
14. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION
 
     The Company operates within one industry segment, menhaden fishing for the
production and sale of fish meal, fish solubles and fish oil. Export sales of
fish oil and fish meal were approximately $26.7 million, $20.9 million and $21.5
million in fiscal 1995, 1996 and 1997, respectively. Such sales were made
primarily to European markets. In fiscal 1995, sales to one customer were
approximately $12.3 million; in 1996 and 1997, no sales to any one customer
exceeded 10% of consolidated sales.
 
                                      F-15
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The following table shows the geographical distribution of revenues based
on location of customers:
 
<TABLE>
<CAPTION>
                                                1995                  1996                  1997
                                          ----------------      ----------------      -----------------
                                          REVENUES     %        REVENUES     %        REVENUES      %
                                          -------    -----      -------    -----      --------    -----
<S>                                       <C>        <C>        <C>        <C>        <C>         <C>
U.S....................................   $68,296     72.0%     $72,711     77.7%     $ 96,071     81.7%
Europe.................................    25,019     26.3       14,578     15.6         7,274      6.2
Canada.................................     1,179      1.2        1,896      2.0         6,381      5.4
Mexico.................................        22     --          1,246      1.3         3,223      2.7
Other..................................       443      0.5        3,178      3.4         4,615      4.0
                                          -------    -----      -------    -----      --------    -----
                                          $94,959    100.0%     $93,609    100.0%     $117,564    100.0%
                                          -------    -----      -------    -----      --------    -----
                                          -------    -----      -------    -----      --------    -----
</TABLE>
 
15. SUBSEQUENT EVENTS -- ACQUISITIONS
 
   
     On November 3, 1997, the Company acquired the fishing and processing assets
of American Protein, Inc. ('American Protein'), which operated ten steamers and
a menhaden processing plant in the Chesapeake Bay area, for $14.5 million in
cash (the 'American Protein Acquisition'). American Protein's facilities were
located in close proximity to the Company's Reedville, Virginia facility.
Shortly after completing this transaction, the Company closed the American
Protein processing plant and began integrating its assets into the Company's
existing operations.
    
 
   
     On November 25, 1997, the Company purchased the fishing and processing
assets of Gulf Protein, Inc. ('Gulf Protein'), which included six steamers, five
spotter planes and the processing equipment located at the Gulf Protein plant
near Morgan City, Louisiana, for $13.6 million in cash and the assumption of
$883,000 in liabilities (the 'Gulf Protein Acquisition,' and together with the
American Protein Acquisition, the 'Recent Acquisitions'). The Company accounted
for this acquisition as a purchase, thus the results of operations began being
included in the Company's Statement of Operations beginning November 25, 1997.
In connection with the Gulf Protein Acquisition, the Company also entered into a
five-year lease for the Gulf Protein plant at a $220,000 annual rental rate. The
Company is currently upgrading this plant's processing capabilities so that it
can manufacture specialty meals. The Company intends to begin operations at the
Morgan City, Louisiana plant at the start of the 1998 fishing season.
    
 
   
     Such acquisitions were financed by a $28.1 million intercompany loan from
Zapata. The interest rate on this loan is 8.5% and is repayable in quarterly
installments beginning May 1, 1998. The loan matures August 1, 2002.
    
 
16. SUBSEQUENT EVENTS -- OTHER
 
MERGER INTO OMEGA PROTEIN CORPORATION
 
   
     On January 26, 1998, Marine Genetics Corporation merged into Omega Protein
Corporation, a Nevada corporation and wholly owned by Zapata, with Omega Protein
Corporation being the surviving entity. The common control merger was accounted
for at historical costs in a manner similar to that in a pooling of interests
accounting. In connection with the merger, Marine Genetics Corporation's
outstanding common stock was converted into Omega Protein Corporation common
stock at the rate of one share for 19,676 shares of Omega Protein Corporation
common stock and Omega Protein Corporation's pre-merger outstanding common stock
was cancelled and treated as treasury stock. As a result, the Company's
capitalization is as follows: authorized capital stock of 80,000,000 shares
common stock, par value $0.01 per share, and 10,000,000 shares of preferred
stock, par value $0.01 per share; and outstanding shares of 19,676,000 shares
of common stock.
    
 
                                      F-16
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
CONTEMPLATED INITIAL PUBLIC OFFERING
 
   
     The Company is currently contemplating an Initial Public Offering of
6,000,000 of its common stock, with 4,000,000 shares being offered by the
Company and 2,000,000 shares being offered by Zapata Corporation. Also in
connection with the planned Initial Public Offering, the Company will have
authorized Preferred Stock of 10,000,000 shares at a $0.01 par value per share.
Zapata will own approximately 74.7% (approximately 71.6% if the underwriters'
over-allotment options are exercised in full) of the shares of common stock upon
completion of the Initial Public Offering.
    
 
REVOLVING LINE OF CREDIT
 
   
     On December 30, 1997, the Company entered into a commitment letter with a
financial institution to enter into a revolving line of credit with a maximum
credit limit of $20 million. Interest will be either LIBOR plus a margin of
1.35% to 1.50% or at prime minus 0.75%. The Company will be required to comply
with certain covenants upon the closing of this credit facility. The credit
facility will be collateralized by all of the Company's assets not pledged to
collateralize the Company's other borrowings exclusive of the Company's vessels
and real estate.
    
 
STOCK OPTION PLANS
 
1998 Long-Term Incentive Plan
 
     On January 26, 1998, the 1998 Long-Term Incentive Plan of the Company (the
'1998 Incentive Plan') was approved by the Company's Board. The 1998 Incentive
Plan provides for the grant of any or all of the following types of awards:
stock options, stock appreciation rights, stock awards and cash awards. The
Board granted 1,657,360 stock options under the 1998 Incentive Plan at $12.75
per share on January 26, 1998. These options granted vest ratably over three
years from the date of grant and expire ten years from the date of grant.
 
Non-Management Director Stock Option Plan
 
   
     On January 26, 1998, the Non-Management Director Stock Option Plan (the
'Directors Plan') was approved by the Board. The Directors Plan provides that
the initial Chairman of the Board be granted options to purchase 568,200 shares
of the common stock and each other initial non-employee director of the Company
will be granted options to purchase 14,200 shares of common stock at a price
determined by the Board. The Board granted 582,400 stock options under the
Directors Plan at $12.75 per share on January 26, 1998, of which 568,200 were
granted to the Chairman of the Board and 14,200 were granted to the other
non-management Board member. These options granted generally vest ratably over
the three years from the date of grant and expire ten years from the date of
grant.
    
 
   
17. IMPLEMENTATION OF SFAS 128
    
 
   
     In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, 'Earnings Per Share' ('SFAS 128') which established standards
for computing and presenting earnings per share. The Company adopted the
statement on October 1, 1997. Basic earnings per share was computed by dividing
income by the weighted average number of common shares outstanding. Diluted
earnings per share was computed by dividing income by the sum of the weighted
average number of common shares outstanding and the effect of unexercised
employee stock options.
    
 
                                      F-17
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
   
18. QUARTERLY FINANCIAL DATA (UNAUDITED)
    
 
   
<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                       --------------------------------------------------
                                                       DECEMBER 31    MARCH 31    JUNE 30    SEPTEMBER 30
                                                       -----------    --------    -------    ------------
                                                            (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                    <C>            <C>         <C>        <C>
Fiscal 1996
     Revenues.......................................     $23,466      $14,383     $20,920       $34,840
     Operating income...............................       3,063        1,980       3,771         1,690
     Net income.....................................       1,725        1,114       2,200           889
     Net income per share...........................     $  0.09      $  0.06     $  0.11       $  0.04
Fiscal 1997
     Revenues.......................................     $25,623      $22,964     $31,025       $37,952
     Operating income...............................       3,792        3,503       6,451         4,459
     Net income.....................................       2,225        2,185       3,713         2,302
     Net income per share...........................     $  0.11      $  0.11     $  0.19       $  0.12
</TABLE>
    
 
                                      F-18


<PAGE>
<PAGE>

   
                           OMEGA PROTEIN CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
    
 
   
<TABLE>
<CAPTION>
                                                                                      SEPTEMBER 30,    DECEMBER 31,
                                                                                          1997             1997
                                                                                      -------------    ------------
                                                                                             (IN THOUSANDS,
                                                                                           EXCEPT FOR SHARES)
<S>                                                                                   <C>              <C>
                                      ASSETS
Current assets:
     Cash and cash equivalents.....................................................      $  5,504        $ 10,258
     Receivables, net..............................................................         9,936           9,387
     Inventories...................................................................        38,448          35,787
     Prepaid expenses and other current assets.....................................           746           1,368
                                                                                      -------------    ------------
          Total current assets.....................................................        54,634          56,800
                                                                                      -------------    ------------
Other assets.......................................................................         4,917           5,574
                                                                                      -------------    ------------
Property and equipment, net........................................................        40,889          68,246
                                                                                      -------------    ------------
          Total assets.............................................................      $100,440        $130,620
                                                                                      -------------    ------------
                                                                                      -------------    ------------
 
                       LIABILITIES AND STOCKHOLDER'S EQUITY
 
Current liabilities:
     Current maturities of long-term debt..........................................      $  1,034        $  1,540
     Accounts payable..............................................................         1,622           1,356
     Accrued liabilities...........................................................        15,423           8,208
     Amounts due to parent -- current..............................................         5,159           8,798
                                                                                      -------------    ------------
          Total current liabilities................................................        23,238          19,902
                                                                                      -------------    ------------
Long-term debt.....................................................................        11,294          11,282
                                                                                      -------------    ------------
Deferred income taxes..............................................................         1,180           1,280
                                                                                      -------------    ------------
Other liabilities..................................................................           374             374
                                                                                      -------------    ------------
Amounts due to parent -- non-current...............................................       --               28,116
                                                                                      -------------    ------------
Commitments and contingencies......................................................       --               --
Stockholder's equity:
     Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued...       --               --
     Common stock, $0.01 par value authorized; 80,000,000 shares; issued and
      outstanding: 19,676,000 shares...............................................           197             197
     Capital in excess of par value................................................        43,731          43,731
     Reinvested earnings, from October 1, 1990.....................................        20,426          25,738
                                                                                      -------------    ------------
          Total stockholder's equity...............................................        64,354          69,666
                                                                                      -------------    ------------
               Total liabilities and stockholder's equity..........................      $100,440        $130,620
                                                                                      -------------    ------------
                                                                                      -------------    ------------
</TABLE>
    
 
   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.
 
                                      F-19


<PAGE>
<PAGE>

   
                           OMEGA PROTEIN CORPORATION
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
    
 
   
<TABLE>
<CAPTION>
                                                                                          THREE MONTHS ENDED
                                                                                             DECEMBER 31,
                                                                                        -----------------------
                                                                                         1996            1997
                                                                                        -------         -------
                                                                                            (IN THOUSANDS,
                                                                                           EXCEPT PER SHARE
                                                                                               AMOUNTS)
<S>                                                                                     <C>             <C>
Revenues........................................................................        $25,623         $29,503
Cost of sales...................................................................         20,806          19,274
                                                                                        -------         -------
Gross profit....................................................................          4,817          10,229
Selling, general and administrative.............................................          1,025           1,154
                                                                                        -------         -------
Operating income................................................................          3,792           9,075
Interest expense, net...........................................................           (202)           (379)
Other expense, net..............................................................             (1)            (13)
                                                                                        -------         -------
Income before income taxes......................................................          3,589           8,683
Provision for income taxes......................................................          1,364           3,371
                                                                                        -------         -------
Net income......................................................................        $ 2,225         $ 5,312
                                                                                        -------         -------
                                                                                        -------         -------
Net income per share (basic)....................................................        $  0.11         $  0.27
                                                                                        -------         -------
                                                                                        -------         -------
Average common shares outstanding...............................................         19,676          19,676
                                                                                        -------         -------
                                                                                        -------         -------
Net income per share (diluted)..................................................        $  0.11         $  0.27
                                                                                        -------         -------
                                                                                        -------         -------
Average common shares and common share equivalents outstanding..................         19,676          19,676
                                                                                        -------         -------
                                                                                        -------         -------
</TABLE>
    
 
   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.
 
                                      F-20
 

<PAGE>
<PAGE>

   
                           OMEGA PROTEIN CORPORATION
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
    
 
   
<TABLE>
<CAPTION>
                                                                                            THREE MONTHS ENDED
                                                                                               DECEMBER 31,
                                                                                           ---------------------
                                                                                            1996          1997
                                                                                           -------      --------
                                                                                              (IN THOUSANDS)
<S>                                                                                        <C>          <C>
Cash flows provided by (used in) operating activities:
     Net income.......................................................................     $ 2,225      $  5,312
     Adjustments to reconcile net income to net cash provided by (used in) operating
      activities:
       Loss (gain) on disposal of assets, net.........................................       --              (30)
       Depreciation and amortization..................................................       1,155         1,672
       Deferred taxes.................................................................         186           100
       Changes in assets and liabilities, net of the effect of disposition:
          Receivables.................................................................       3,486           549
          Inventories.................................................................         587         2,661
          Prepaid expenses and other current assets...................................        (498)         (622)
          Accounts payable and accrued liabilities....................................      (6,729)       (7,481)
          Amounts due to parent.......................................................       1,462         3,639
          Other, net..................................................................         363           (58)
                                                                                           -------      --------
               Total adjustments......................................................          12           430
                                                                                           -------      --------
               Net cash provided by operating activities..............................       2,237         5,742
                                                                                           -------      --------
Cash flows provided by (used in) investing activities:
     Proceeds from sale of assets, net................................................       --              503
     Capital expenditures.............................................................      (1,698)       (1,102)
     Acquisitions.....................................................................       --          (28,999)
                                                                                           -------      --------
               Net cash used in investing activities..................................      (1,698)      (29,598)
                                                                                           -------      --------
Cash flow provided by (used in) financing activities:
     Long term debt...................................................................       1,849           883
     Borrowings from parent -- non-current............................................       --           28,116
     Principal payments of debt obligations...........................................        (119)         (389)
                                                                                           -------      --------
               Net cash provided by financing activities..............................       1,730        28,610
                                                                                           -------      --------
Net increase in cash and cash equivalents.............................................       2,269         4,754
Cash and cash equivalents at beginning of period......................................       2,899         5,504
                                                                                           -------      --------
Cash and cash equivalents at end of period............................................     $ 5,168      $ 10,258
                                                                                           -------      --------
                                                                                           -------      --------
</TABLE>
    
 
   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.
 
                          
                                         F-21


<PAGE>
<PAGE>

   
                           OMEGA PROTEIN CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    
 
   
1. FINANCIAL STATEMENTS
    
 
   
     The condensed consolidated financial statements included herein have been
prepared by Omega Protein Corporation ('Omega' or the 'Company'), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
The financial statements reflect all adjustments that are, in the opinion of
management, necessary to fairly present such information. All such adjustments
are of a normal recurring nature. Although Omega believes that the disclosures
are adequate to make the information presented not misleading, certain
information and footnote disclosures, including a description of significant
accounting policies, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been condensed or
omitted pursuant to such rules and regulations. These consolidated financial
statements should be read in conjunction with the financial statements and the
notes thereto included in this Registration Statement.
    
 
   
     In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, 'Earnings Per Share' ('SFAS 128') which established standards
for computing and presenting earnings per share. The Company adopted the
statement October 1, 1997. Basic earnings per share was computed by dividing
income by the weighted average number of common shares outstanding. Diluted
earnings per share was computed by dividing income by the sum of the weighted
average number of common shares outstanding and the effect of unexercised
employee stock options.
    
 
   
     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, 'Reporting Comprehensive Income' ('SFAS 130') which is effective for
fiscal years beginning after December 15, 1997. SFAS 130 establishes standards
for reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. It requires (a) classification of items of other comprehensive
income by their nature in a financial statement and (b) display of the
accumulated balance of other comprehensive income separate from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. The Company will adopt the provisions of the statement in
fiscal 1999.
    
 
   
     In June 1997, the FASB also issued Statement of Financial Accounting
Standards No. 131, 'Disclosure about Segments of an Enterprise and Related
Information' ('SFAS 131') which is effective for periods beginning after
December 15, 1997. SFAS 131 establishes standards for reporting information
about operating segments in annual financial statements and requires selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. This Statement
supersedes SFAS 14, Financial Reporting for Segments of a Business Enterprise,
but retains the requirement to report information about major customers. The
Company will adopt the provisions of the statement in fiscal 1999.
    
 
   
     In February 1998, the FASB issued Statement of Financial Accounting
Standards No. 132, 'Employers' Disclosures About Pensions and Other
Postretirement Benefits' ('SFAS 132') which is effective for fiscal year
beginning after December 5, 1997. SFAS 132 significantly changes current
financial statement disclosures requirements from those that were required under
SFAS 87, 'Employers' Accounting for Pensions,' SFAS 88, 'Employers' Accounting
for Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits,' and SFAS 106, 'Employers' Accounting for Postretirement
Benefits Other Than Pensions.' SFAS 132 does not change the existing measurement
or recognition provisions of FASB Statement Nos. 87, 88 or 106. It requires that
additional information be disclosed regarding changes in benefit obligation and
fair values of plan assets, standardizes the disclosure requirements for
pensions and other postretirement benefits and presents them in one footnote and
eliminates certain disclosures that are no longer considered useful. The Company
will adopt the provisions of the statement in fiscal 1999.
    
 
                                      F-22
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 

   
2. ASSET ACQUISITIONS
    
 
   
     On November 3, 1997, the Company acquired the fishing and processing assets
of American Protein, Inc. ('American Protein'), which operated ten steamers and
a menhaden processing plant in the Chesapeake Bay area, for $14.5 million in
cash (the 'American Protein Acquisition'). American Protein's facilities were
located in close proximity to the Company's Reedville, Virginia facility.
Shortly after completing this transaction, the Company closed the American
Protein processing plant and began integrating its assets into the Company's
existing operations.
    
 
   
     On November 25, 1997, the Company purchased the fishing and processing
assets of Gulf Protein, Inc. ('Gulf Protein'), which included six steamers, five
spotter planes and the processing equipment located at the Gulf Protein plant
near Morgan City, Louisiana, for $13.6 million in cash and the assumption of
$883,000 in liabilities (the 'Gulf Protein Acquisition,' and together with the
American Protein Acquisition, the 'Recent Acquisitions'). The Company accounted
for this acquisition as a purchase, thus the results of operations began being
included in the Company's Statement of Operations beginning November 25, 1997.
In connection with the Gulf Protein Acquisition, the Company also entered into a
five-year lease for the Gulf Protein plant at a $220,000 annual rental rate. The
Company is currently upgrading this plant's processing capabilities so that it
can manufacture specialty meals. The Company intends to begin operations at the
Morgan City, Louisiana plant at the start of the 1998 fishing season.
    
 
   
     Such acquisitions were financed by a $28.1 million intercompany loan from
Zapata. The interest rate on this loan is 8.5% and is repayable in quarterly
installments beginning May 1, 1998. The loan matures August 1, 2002.
    
 

   
3. INVENTORY
    
 
   
     Inventory as of September 30, 1997 and December 31, 1997 is summarized as
follows:
    
 
   
<TABLE>
<CAPTION>
                                                                            SEPTEMBER 30,    DECEMBER 31,
                                                                                1997             1997
                                                                            -------------    ------------
                                                                                   (IN THOUSANDS)
<S>                                                                         <C>              <C>
Fish meal................................................................      $19,048          $17,690
Crude fish oil...........................................................       11,188            6,164
Other fish oil...........................................................        1,558            2,442
Fish solubles............................................................          983            1,199
Off-season costs.........................................................        2,420            5,287
Materials and supply.....................................................        3,353            2,978
Other....................................................................       --                  129
                                                                            -------------    ------------
                                                                                38,550           35,889
Less oil inventory reserve...............................................         (102)            (102)
                                                                            -------------    ------------
                                                                               $38,448          $35,787
                                                                            -------------    ------------
                                                                            -------------    ------------
</TABLE>
    
 
   
4. LITIGATION
    
 
   
     The Company is defending various claims and litigation arising from
operations. In the opinion of management, any losses resulting from these
matters will not have a material adverse affect on the Company's results of
operations, cash flows or financial position.
    
 
   
5. COMMITMENT LETTER FOR LINE OF CREDIT
    
 
   
     On December 30, 1997, the Company entered into a commitment letter with a
financial institution to enter into a revolving line of credit with a maximum
credit limit of $20 million. At the Company's election interest will be either
LIBOR plus a margin of 1.35 percent to 1.5 percent or at prime minus
    
 
                                      F-23
 

<PAGE>
<PAGE>

                           OMEGA PROTEIN CORPORATION
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
   
0.75 percent. The Company will be required to comply with certain covenants upon
the closing of this credit facility. The credit facility will be collateralized
by all of the Company's assets not pledged to collateralize the Company's other
borrowings exclusive of the Company's vessels and real estate.
    
 
   
6. SUBSEQUENT EVENTS
    
 
   
MERGER INTO OMEGA PROTEIN CORPORATION
    
 
   
     On January 26, 1998, Marine Genetics Corporation merged into Omega Protein
Corporation, a Nevada Corporation and wholly owned by Zapata, with Omega Protein
Corporation being the surviving entity. The common control merger was accounted
for at historical cost in a manner similar to that in a pooling of interests
accounting. In connection with the merger, Marine Genetics Corporation's
outstanding common stock was converted into Omega Protein Corporation common
stock at the rate of one share for 19,676 shares of Omega Protein Corporation
common stock and Omega Protein Corporation's pre-merger outstanding common stock
was cancelled and treated as treasury stock. As a result, the Company's
capitalization is as follows: authorized capital stock of 80,000,000 shares
common stock, par value $0.01 per share, and 10,000,000 shares of preferred
stock, par value of $0.01 per share, and outstanding shares of 19,676,000
shares of common stock.
    
 
   
CONTEMPLATED INITIAL PUBLIC OFFERING
    
 
   
     The Company is currently contemplating an Initial Public Offering of
6,000,000 of its common stock, with 4,000,000 shares being offered by the
Company and 2,000,000 shares being offered by Zapata Corporation. Also in
connection with the planned Initial Public Offering, the Company will have
authorized Preferred Stock of 10,000,000 shares at $0.01 par value per share.
Zapata will own approximately 74.7% (approximately 71.6% if the underwriters'
over-allotment options are exercised in full) of the shares of common stock
outstanding upon completion of the Initial Public Offering.
    
 
   
STOCK OPTION PLANS
    
 
   
1998 Long-Term Incentive Plan
    
 
   
     On January 26, 1998, the 1998 Long-Term Incentive Plan of the Company (the
'1998 Incentive Plan') was approved by the Company's Board. The 1998 Incentive
Plan provides for the grant of any or all of the following types of awards:
stock options, stock appreciation rights, stock awards and cash awards. The
Board granted 1,657,360 stock options under the 1998 Incentive Plan at $12.75
per share on January 26, 1998. These options granted vest ratably over three
years from the date of grant and expire ten years from the date of grant.
    
 
   
Non-Management Director Stock Option Plan
    
 
   
     On January 26, 1998, the Non-Management Director Stock Option Plan (the
'Director Plan') was approved by the Board. The Directors Plan provides that the
initial Chairman of the Board be granted options to purchase 568,200 shares of
the common stock and each other initial non-employee director of the Company
will be granted options to purchase 14,200 shares of common stock at a price
determined by the Board. The Board granted 582,400 stock options under the
Directors Plan at $12.75 per share on January 26, 1998, of which 568,200 were
granted to the Chairman of the Board and 14,200 were granted to the other Board
member. These options granted generally vest ratably over the three years from
the date of grant and expire ten years from the date of grant.
    
 
                                      F-24



<PAGE>
<PAGE>



                                    [PHOTOS]
  The Company's fish meal products are added to feeds to promote cost-efficient
                               animal production.


                                    [PHOTOS]
 Menhaden oil, rich in nutritionally important Omega-3 fatty acids, is approved
          by the FDA for human consumption and is used as a nutritional
                              supplement in foods.


                                     [PHOTO]
  Fish solubles are an organic replacement/supplement for chemical fertilizers.




<PAGE>
<PAGE>

__________________________________            __________________________________
 
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY OF THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY
OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED BY THIS
PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY
OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
 
UNTIL                   , 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                                                                                              PAGE
                                                                                                                              ----
<S>                                                                                                                           <C>
Prospectus Summary.........................................................................................................     3
Risk Factors...............................................................................................................     6
Company History and Recent Transactions....................................................................................    11
Use of Proceeds............................................................................................................    12
Dividend Policy............................................................................................................    12
Capitalization.............................................................................................................    13
Dilution...................................................................................................................    14
Selected Consolidated Financial Data.......................................................................................    15
Pro Forma Unaudited Consolidated Statement of Operations Data..............................................................    16
Management's Discussion and Analysis of Financial Condition and Results of Operations......................................    17
Business...................................................................................................................    24
Management.................................................................................................................    34
Principal and Selling Stockholders.........................................................................................    39
Certain Transactions and Arrangements Between the Company and Zapata.......................................................    40
Description of Capital Stock...............................................................................................    42
Shares Eligible for Future Sale............................................................................................    49
Underwriting...............................................................................................................    51
Legal Matters..............................................................................................................    52
Experts....................................................................................................................    52
Available Information......................................................................................................    52
Index to Financial Statements..............................................................................................   F-1
</TABLE>
    
 
                                6,000,000 Shares
 
                                     [Logo]
 
                                  Common Stock
 
                             ---------------------
                                   PROSPECTUS
                             ---------------------
 
                       PRUDENTIAL SECURITIES INCORPORATED

                            DEUTSCHE MORGAN GRENFELL
 
   
                                 March   , 1998
    
 
__________________________________            __________________________________


<PAGE>
<PAGE>

                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
     The estimated expenses in connection with the issuance and distribution of
the securities being registered hereby, other than underwriting discounts and
commissions, are itemized below.
 
   
<TABLE>
<S>                                                                                  <C>
Securities and Exchange Commission registration fee...............................   $ 32,568
NASD filing fee...................................................................     11,540
NYSE listing fee..................................................................    154,600
Accounting fees and expenses......................................................    150,000
Legal fees and expenses...........................................................    225,000
Printing and engraving expenses...................................................    150,000
Blue Sky fees and expenses (including legal fees).................................      3,000
Transfer Agent and Registrar fees and expenses....................................      3,500
Miscellaneous.....................................................................     69,792
                                                                                     --------
     Total........................................................................   $800,000*
                                                                                     --------
                                                                                     --------
</TABLE>
    
 
- ------------
 
   
*  Of this amount, the Company is paying $534,000 and the Selling Stockholder is
   paying $266,000.
    
 
   
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS
    
 
     The Company's Articles of Incorporation and By-Laws limit the liability of
directors to the fullest extent permitted by Nevada law. This is intended to
allow the Company's officers and directors the benefit of the Nevada Corporation
Law which provides that directors of Nevada corporations may be relieved of
monetary liabilities for breach of their fiduciary duties as directors, except
under certain circumstances, including (i) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law or (ii) the willful
or grossly negligent payment of unlawful distributions.
 
     The Nevada Corporation Law and the Company's Articles of Incorporation and
Bylaws authorize indemnification of a director, officer, employee or agent of
the Company against expenses incurred by him or her in connection with any
action, suit or proceeding to which such person is named a party by reason of
having acted or served in such capacity, if he acted in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal proceeding, had
no reasonable cause to believe his conduct was unlawful. With respect to
judgments or settlements obtained against a director, officer, employee or agent
of the Company resulting from lawsuits filed by the Company or derivative suits
filed on behalf of the Company, such a person cannot be indemnified for such
expenses unless and only to the extent that a court determines that, in view of
all the circumstances, the person is fairly and reasonably entitled to indemnity
for such expenses. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the 'Securities Act') may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefor, unenforceable.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
 
   
     During the previous three years, the registrant has issued and sold the
following securities without registration under the Securities Act (none of
which sales were underwritten):
    
 
   
     The Company was formed on January 23, 1998, at which time it issued 1,000
of its shares of Common Stock for a purchase price of $1.00 per share to the
Selling Stockholder. Such issuance of shares was exempt from registration under
the Securities Act pursuant to Section 4(2) thereof as a transaction by the
issuer not involving any public offering.
    
 
   
     On January 26, 1998, the Marine Genetics Corporation merged into the
Company. In connection with the Merger, the Company issued 19,676,000 shares of
Common Stock to the Selling Stockholder, which was Marine Genetics Corporation's
sole stockholder at the time. Such issuance was exempt from registration under
the Securities Act pursuant to Section 4(2) thereof as a transaction by the
issuer not involving any public offering.
    
 
                                      II-1
 

<PAGE>
<PAGE>

   
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
 
     (a) Exhibits:
 
   
<TABLE>
<S>     <C>
 1.     -- Form of Underwriting Agreement**
 2.1    -- Agreement and Plan of Merger between Marine Genetics, Inc., a Delaware corporation and Omega Protein
           Corporation, a Nevada corporation*
 3.1    -- Articles of Incorporation*
 3.2    -- By-Laws*
 5.1    -- Opinion of Woods, Oviatt, Gilman, Sturman & Clarke, LLP
10.1    -- Form of Employment Agreement dated           , with Joseph L. von Rosenberg III**
10.2    -- Form of Employment Agreement with Robert W. Stockton**
10.3    -- Form of Employment Agreement with Kelsey D. Short Jr.**
10.4    -- Form of Employment Agreement with Clyde R. Gilbert**
10.5    -- Form of Employment Agreement with Eric T. Furey**
10.6    -- Form of Separation Agreement with Zapata Corporation**
10.7    -- Form of Tax Indemnity Agreement with Zapata Corporation**
10.8    -- Form of Registration Rights Agreement with Zapata Corporation**
10.9    -- Form of Sublease Agreement with Zapata Corporation**
10.10   -- Form of Administrative Services Agreement, dated                  with Zapata Corporation**
10.11   -- Lease Agreement dated April 1985 with General Jackson Partnership
10.12   -- Lease dated July 1, 1992 with Ardoin Limited Partnership
10.13   -- Lease Agreement dated November 25, 1997 with O.W. Burton Jr., individually and as trustee of the Trust of
           Anna Burton
10.14   -- Lease Agreement dated November 16, 1984 with Andre Cessac
10.15   -- Commercial Lease Agreement dated January 1, 1971 with Purvis Theall and Ethlyn Cessac
10.16   -- Lease Agreement dated January 4, 1994 with City of Abbeville, Louisiana
10.17   -- Loan Agreement dated August 29, 1997 with Hibernia National Bank, Lender and Zapata Protein, Inc.,
           Guarantor
10.18   -- Security Agreement dated August 29, 1997 in favor of Hibernia National Bank
10.19   -- Guarantee Agreement dated August 29, 1997 in favor of Hibernia National Bank
10.20   -- United States Guaranteed Promissory Note dated March 31, 1993 in favor of Bear, Stearns Securities Corporation
10.21   -- Amendment No. 1 to Promissory Note dated March 31, 1993 to the United States of America pursuant to the provisions
           of Title XI of the Marine Act of 1936 in favor of Bear, Stearns Securities Corporation
10.22   -- Amendment No. 1 to First Preferred Ship Mortgage dated March 31, 1993 to the United States of America
10.23   -- Supplement No. 5 to First Preferred Fleet Mortgage dated March 31, 1993 in favor of Chemical Bank, as Trustee
10.24   -- Amendment No. 1 to Guaranty Deed of Trust dated March 31, 1993 for the benefit of the United States of America
10.25   -- Supplement No. 2 to Security Agreement dated March 31, 1993 in favor of the United States of America
10.26   -- Indemnity Agreement Regarding Hazardous Materials dated March 31, 1993 in favor of the United States of America
10.27   -- United States Guaranteed Promissory Note dated September 27, 1994 in favor of Sun Bank of Tampa Bay
10.28   -- Promissory Note to the United States of America dated September 27, 1994 pursuant to the provisions of Title XI of the
           Marine Act of 1936 in favor of Sun Bank of Tampa Bay
10.29   -- First Preferred Ship Mortgage dated September 27, 1994 to the United States of America
10.30   -- Collateral Mortgage and Collateral Assignment of Lease dated September 27, 1994 in favor of the United States of America
10.31   -- Collateral Mortgage Note dated September 27, 1994 in favor of the United States of America
10.32   -- Collateral Pledge Agreement dated September 27, 1994 in favor of the United States of America
10.33   -- Guaranty Agreement dated September 27, 1994 in favor of the United States of America
10.34   -- Title XI Financial Agreement dated September 27, 1994 with the United States of America
10.35   -- Security Agreement dated September 27, 1994 in favor of the United States of America
</TABLE>
    
 
                                      II-2
 

<PAGE>
<PAGE>

 
   
<TABLE>
<S>     <C>
10.36   -- United States Guaranteed Promissory Note dated October 30, 1996 in favor of Coastal Securities
10.37   -- Promissory Note dated October 30, 1996 to the United States of America pursuant to the provisions of Title XI
           of the Marine Act of 1936 in favor of Coastal Securities
10.38   -- Guaranty Agreement dated October 30, 1996 in favor of the United States of America
10.39   -- Title XI Financial Agreement dated October 30, 1996 with the United States of America
10.40   -- Certification and Indemnification Agreement Regarding Environmental Matters dated October 30, 1996
           in favor of the United States of America
10.41   -- Deed of Trust dated October 30, 1996 for the benefit of the United States of America
10.42   -- 1998 Long-Term Incentive Plan**
10.43   -- Non-Management Director Stock Options Plan**
10.44   -- Asset Purchase Agreement dated as of September 16, 1997, among Zapata Protein, Inc., Venture Milling
           Company and Perdue Farms Incorporated*
10.45   -- Asset Purchase Agreement dated as of November 3, 1997 among Protein (USA) Company, American Proteins, Inc.
           and Chesapeake Bay Fishing Co., L.C.*
10.46   -- Asset Purchase Agreement dated as of November 25, 1997 among Protein Securities Company, and Gulf Protein, Inc.*
21.1    -- Schedule of Subsidiaries**
23.1    -- Consent of Coopers & Lybrand L.L.P.
23.2    -- Consent of Woods, Oviatt, Gilman, Sturman & Clarke, LLP (Contained in Exhibit 5.1)
27.     -- Financial Data Schedule
</TABLE>
    
 
- ------------
 
   
 * Previously filed.
    
 
   
** To be filed by amendment.
    
   
                            ------------------------
     (b) Financial Statements Schedules.
    
 
   
Schedule II -- Valuation and Qualifying Accounts
    
 
ITEM 17. UNDERTAKINGS.
 
     The undersigned registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
 
     The undersigned registrant hereby undertakes that:
 
          (1) Insofar as indemnification for liabilities arising under the
     Securities Act may be permitted to directors, officers and controlling
     persons of the registrant pursuant to the foregoing provisions, or
     otherwise, the registrant has been advised that in the opinion of the
     Securities and Exchange Commission such indemnification is against public
     policy as expressed in the Act and is, therefore, unenforceable. In the
     event that a claim for indemnification against such liabilities (other than
     the payment by the registrant of expenses incurred or paid by a director,
     officer or controlling person of the registrant in the successful defense
     of any action, suit or proceeding) is asserted by such director, officer or
     controlling person in connection with the securities being registered, the
     registrant will, unless in the opinion of its counsel the matter has been
     settled by controlling precedent, submit to a court of appropriate
     jurisdiction the question whether such indemnification by it is against
     public policy as expressed in the Securities Act and will be governed by
     the final adjudication of such issue.
 
          (2) For purposes of determining any liability under the Securities Act
     the information omitted from the form of prospectus filed as part of this
     registration statement in reliance upon Rule 430A and contained in a form
     of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
     497(h) under the Securities Act shall be deemed to be part of this
     registration statement as of the time it was declared effective.
 
          (3) For the purpose of determining any liability under the Securities
     Act each post-effective amendment that contains a form of prospectus shall
     be deemed to be a new registration statement relating to the securities
     offered therein and the offering of such securities at that time shall be
     deemed to be the initial bona fide offering thereof.
 
                                      II-3


<PAGE>
<PAGE>

                                   SIGNATURES
 
   
     Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, Texas, on
March 10, 1998.
    
                                          OMEGA PROTEIN CORPORATION

                                          BY: /S/ JOSEPH L. VON ROSENBERG III
                                              ..................................
                                             Name: Joseph L. von Rosenberg III
                                             Title:  Chief Executive Officer and
                                                     President
   
    
 
     In accordance with the requirements of the Securities Act, this
Registration Statement on Form S-1 has been signed by the following persons in
their capacities and on the date signed.
 
   
<TABLE>
<CAPTION>
                SIGNATURE                                      TITLE                              DATE
- ------------------------------------------  --------------------------------------------   -------------------
<C>                                         <S>                                            <C>
     /s/ JOSEPH L. VON ROSENBERG III        Director, Chief Executive Officer and             March 10, 1998
 .........................................    President
      (JOSEPH L. VON ROSENBERG III)
 
          /s/ ROBERT W. STOCKTON            Executive Vice President, Chief Financial         March 10, 1998
 .........................................    Officer and Principal Accounting Officer
           (ROBERT W. STOCKTON)
 
            /s/ MALCOLM GLAZER              Director                                          March 10, 1998
 .........................................
             (MALCOLM GLAZER)
 
             /s/ AVRAM GLAZER               Chairman of the Board of Directors and            March 10, 1998
 .........................................    Director
              (AVRAM GLAZER)
</TABLE>
    
 
                                      II-4
 

<PAGE>
<PAGE>

   
                       REPORT OF INDEPENDENT ACCOUNTANTS
    
 
   
To the Stockholder and Board of Directors
OMEGA PROTEIN CORPORATION:
    
 
   
     In connection with our audits of the consolidated financial statements of
Omega Protein Corporation (formerly Marine Genetics Corporation) as of September
30, 1997 and 1996, and for each of the three years in the period ended September
30, 1997, which financial statements are included in this Prospectus and
Registration Statement, we have also audited the financial statement schedule
listed in Item 16(b) of Part II herein.
    
 
   
     In our opinion, this financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information required to be included therein.
    
 
   
                                          COOPERS & LYBRAND L.L.P.
    
 
   
Houston, Texas
December 11, 1997
    
 
                                      II-5
 

<PAGE>
<PAGE>

   
                                                                     SCHEDULE II
    
 
   
                                 OMEGA PROTEIN
                       VALUATION AND QUALIFYING ACCOUNTS
    
 
   
<TABLE>
<CAPTION>
                                                                    ADDITIONS
                                                             ------------------------
                                               BALANCE AT    CHARGED TO    CHARGED TO                     BALANCE AT
                                               BEGINNING     COSTS AND       OTHER                          END OF
DESCRIPTION                                    OF PERIOD      EXPENSES      ACCOUNTS     DEDUCTIONS(A)      PERIOD
- --------------------------------------------   ----------    ----------    ----------    -------------    ----------
<S>                                            <C>           <C>           <C>           <C>              <C>
September 30, 1995:
     Allowance for doubtful accounts........    $163,812        --           --              --            $163,812
     Inventory reserve......................     102,000        --           --              --             102,000
 
September 30, 1996:
     Allowance for doubtful accounts........     163,812      $  8,759       --             $(11,690)       160,881
     Inventory reserve......................     102,000        --           --              --             102,000
 
September 30, 1997:
     Allowance for doubtful accounts........     160,881        50,000       --              (35,164)       175,717
     Inventory reserve......................     102,000        --           --              --             102,000
</TABLE>
    
 
   
- ------------
    
 
   
(A) Allowance for Doubtful Accounts -- uncollectible accounts written off
    
 
                                      II-6


<PAGE>
<PAGE>

                                 EXHIBIT INDEX
 
   
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                          DESCRIPTION OF EXHIBIT                                          PAGE
- ------   ----------------------------------------------------------------------------------------------------   -----
<S>      <C>                                                                                                    <C>
  1.     -- Form of Underwriting Agreement**
  2.1    -- Agreement and Plan of Merger between Marine Genetics, Inc., a Delaware corporation and Omega
            Protein Corporation, a Nevada corporation*
  3.1    -- Articles of Incorporation*
  3.2    -- By-Laws*
  5.1    -- Opinion of Woods, Oviatt, Gilman, Sturman & Clarke, LLP
 10.1    -- Form of Employment Agreement with Joseph L. von Rosenberg III**
 10.2    -- Form of Employment Agreement with Robert W. Stockton**
 10.3    -- Form of Employment Agreement with Kelsey D. Short Jr.**
 10.4    -- Form of Employment Agreement with Clyde R. Gilbert**
 10.5    -- Form of Employment Agreement with Eric T. Furey**
 10.6    -- Form of Separation Agreement with Zapata Corporation**
 10.7    -- Form of Tax Indemnity Agreement with Zapata Corporation**
 10.8    -- Form of Registration Rights Agreement with Zapata Corporation**
 10.9    -- Form of Sublease Agreement with Zapata Corporation**
 10.10   -- Form of Administrative Services Agreement, dated with Zapata Corporation**
 10.11   -- Lease Agreement dated April 1985 with General Jackson Partnership
 10.12   -- Lease dated July 1, 1992 with Ardoin Limited Partnership
 10.13   -- Lease Agreement dated November 25, 1997 with O.W. Burton Jr., individually and as trustee of the
            Trust of Anna Burton
 10.14   -- Lease Agreement dated November 16, 1984 with Andre Cessac
 10.15   -- Commercial Lease Agreement dated January 1, 1971 with Purvis Theall and Ethlyn Cessac
 10.16   -- Lease Agreement dated January 4, 1994 with City of Abbeville, Louisiana
 10.17   -- Loan Agreement dated August 29, 1997 with Hibernia National Bank, Lender
 10.18   -- Security Agreement dated August 29, 1997 in favor of Hibernia National Bank
 10.19   -- Guarantee Agreement dated August 29, 1997 in favor of Hibernia National Bank
 10.20   -- United States Guaranteed Promissory Note dated March 31, 1993 in favor of Bear, Stearns Securities
            Corporation
 10.21   -- Amendment No. 1 to Promissory Note dated March 31, 1993 to the United States of America pursuant to
            the provisions of Title XI of the Marine Act of 1936 in favor of Bear, Stearns Securities Corporation
 10.22   -- Amendment No. 1 to First Preferred Ship Mortgage dated March 31, 1993 to the United States
            of America
 10.23   -- Supplement No. 5 to First Preferred Fleet Mortgage dated March 31, 1993 in favor of Chemical Bank,
            as Trustee
 10.24   -- Amendment No. 1 to Guaranty Deed of Trust dated March 31, 1993 for the benefit of the United States
            of America
 10.25   -- Supplement No. 2 to Security Agreement dated March 31, 1993 in favor of the United States
            of America
 10.26   -- Indemnity Agreement Regarding Hazardous Materials dated March 31, 1993 in favor of the
            United States of America
 10.27   -- United States Guaranteed Promissory Note dated September 27, 1994 in favor of Sun Bank
            of Tampa Bay
 10.28   -- Promissory Note to the United States of America dated September 27, 1994  pursuant to the
            provisions of Title XI of the Marine Act of 1936 in favor of Sun Bank of Tampa Bay
 10.29   -- First Preferred Ship Mortgage dated September 27, 1994 to the United States of America
 10.30   -- Collateral Mortgage and Collateral Assignment of Lease dated September 27, 1994 in favor of the
            United States of America
 10.31   -- Collateral Mortgage Note dated September 27, 1994 in favor of the United States
            of America
</TABLE>
    
 

<PAGE>
<PAGE>

   
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                          DESCRIPTION OF EXHIBIT                                          PAGE
- ------   ----------------------------------------------------------------------------------------------------   -----
<S>      <C>                                                                                                    <C>
 10.32   -- Collateral Pledge Agreement dated September 27, 1994 in favor of the United States of America
 10.33   -- Guaranty Agreement dated September 27, 1994 in favor of the United States of America
 10.34   -- Title XI Financial Agreement dated September 27, 1994 with the United States of America
 10.35   -- Security Agreement dated September 27, 1994 in favor of the United States of America
 10.36   -- United States Guaranteed Promissory Note dated October 30, 1996 in favor of Coastal Securities
 10.37   -- Promissory Note to the United States of America, pursuant to the provisions of Title XI of
            the Marine Act of 1936 dated October 30, 1996 in favor of Coastal Securities
 10.38   -- Guaranty Agreement dated October 30, 1996 in favor of the United States of America
 10.39   -- Title XI Financial Agreement dated October 30, 1996 with the United States of America
 10.40   -- Certification and Indemnification Agreement Regarding Environmental Matters dated October
            30, 1996 in favor of the United States of America
 10.41   -- Deed of Trust dated October 30, 1996 for the benefit of the United States of America
 10.42   -- 1998 Long-Term Incentive Plan**
 10.43   -- Non-Management Director Stock Options Plan**
 10.44   -- Asset Purchase Agreement dated as of September 16, 1997, among Zapata Protein, Inc., Venture
            Milling Company and Perdue Farms Incorporated*
 10.45   -- Asset Purchase Agreement dated as of November 3, 1997 among Protein (USA) Company, American
            Proteins, Inc. and Chesapeake Bay Fishing Co., L.C.*
 10.46   -- Asset Purchase Agreement dated as of November 25, 1997 among Protein Securities Company, and
            Gulf Protein, Inc.*
 10.47   -- Form of Directors Indemnity Agreement**
 21.1    -- Schedule of Subsidiaries**
 23.1    -- Consent of Coopers & Lybrand L.L.P.
 23.2    -- Consent of Woods, Oviatt, Gilman, Sturman & Clarke, LLP (Contained in Exhibit 5.1)
 27.     -- Financial Data Schedule
 </TABLE>
    
- ------------
 
   
 * Previously filed
    
 
   
** To be filed by amendment.
    


                          STATEMENT OF DIFFERENCES
                          ------------------------

  The trademark symbol shall be expressed as............................  'tm'
  The registered trademark symbol shall be expressed as.................   'r'
  The section symbol shall be expressed as..............................  'SS'



<PAGE>



<PAGE>


                   WOODS, OVIATT, GILMAN, STURMAN & CLARKE LLP
                               44 EXCHANGE STREET
                            ROCHESTER, NEW YORK 14614

                                 March 10, 1998

Omega Protein Corporation
1717 St. James Place
Suite 550
Houston, TX 77056


Attention: Joseph L. von Rosenberg, III, Chief Executive Officer and President

Dear Mr. von Rosenberg:

     In our capacity as counsel TO OMEGA PROTEIN CORPORATION (THE "COMPANY"), we
have been requested to furnish to you an opinion regarding the Four Million
(4,000,000) shares of the Company's Common Stock, $.01 par value per share (the
"Common Stock") together with up to 600 additional shares of Common Stock
subject to an over-allotment option (collectively the "Company Shares"), to be
issued by the Company in connection with the Company's initial public offering,
as described in the Registration Statement on Form S-1 (the "Registration
Statement") filed by the Company with the Securities and Exchange Commission
under the Securities Act of 1933, as amended ("Securities Act"). We have further
been requested to furnish to you an opinion regarding the 2,000,000 Shares of
Common Stock together with up to 300 additional shares of Common Stock subject
to an over-allotment option ("Selling Stockholder Shares" and together with the
Company Shares the "Shares") to be sold by Zapata Corporation under the
Registration Statement as described therein. We understand that the Shares are
to be offered and sold in the manner described in the Registration Statement.

     We have acted as counsel to the Company in connection with the preparation
of the Registration Statement. We are familiar with the Proceedings of the Board
of Directors of the Company on___________________ in connection with the
authorization, issuance and sale of the Company Shares (the "Resolutions"). We
have examined such other documents as we consider necessary to render this
opinion.

     Based upon the foregoing, we are of the opinion that: (i) the Shares have
been duly authorized, (ii) the Selling Stockholder Shares have been validly
issued, are fully paid and non-assessable, and when sold and delivered pursuant
to the Registration Statement shall be free of any restrictive legends thereon,
and (iii) the Company Shares when issued and delivered by the Company against
payment therefor at the price


<PAGE>

<PAGE>

American Stock Transfer & Trust Company
March 10, 1998
Page 2

determined pursuant to the Resolutions, will be validly issued, fully paid and
nonassessable, and may be issued free of restrictive legends.

     We consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to this Firm under the caption "Legal Matters"
in the prospectus contained therein. This consent is not to be construed as an
omission that we are a person whose consent is required to be filed with the
Registration Statement under the provisions of the Securities Act.

     Any questions regarding this opinion may be directed to Gordon E. Forth,
Esq. of this firm at (716) 987-2801.

                                    Very truly yours,

                        WOODS, OVIATT, GILMAN, STURMAN & CLARKE LLP


<PAGE>




<PAGE>


================================================================================

                                      LEASE


                           GENERAL JACKSON PARTNERSHIP

                                    Landlord



                                       To



                            ZAPATA HAYNIE CORPORATION

                                     Tenant



                                 April ___, 1985

================================================================================




<PAGE>


<PAGE>


                                TABLE OF CONTENTS

Article One - Leased Premises.............................................. 1

        Section 1.01 Description........................................... 1
        Section 1.02 Rentable Area......................................... 1
        Section 1.03 Construction of Leased Premises....................... 1
        Section 1.04 Ownership of Movables................................. 1
        Section 1.05 Parking............................................... 2
        Section 1.06 Building Name......................................... 2
        Section 1.07 Supplementary Agreement............................... 2

Article Two - Term......................................................... 2

        Section 2.01 Lease Term............................................ 2
        Section 2.02 Inability to Deliver Possession....................... 2

Article Three - Rent....................................................... 2

        Section 3.01 Base Rent............................................. 2
        Section 3.02 Real Property Taxes and Adjustments................... 3
        Section 3.03 Net Lease............................................. 3

Article Four - Use and Operation........................................... 4

        Section 4.01 Permitted Uses........................................ 4
        Section 4.02 Prohibited Activities................................. 4
        Section 4.03 Compliance With Laws, Rules and Regulations........... 4
        Section 4.04 Landlord's Entry of Premises.......................... 4
        Section 4.05 Peaceful Possession................................... 4
        Section 4.06 Tenant's Compliance With Laws..........................4

Article Five - Maintenance and Alterations................................. 5

        Section 5.01 Maintenance........................................... 5
        Section 5.02 Tenant's Maintenance.................................. 5
        Section 5.03 Authorized Representatives............................ 5
        Section 5.04 Alterations........................................... 5
        Section 5.05 Mechanics Lien........................................ 6

Article Six - Utilities and Services....................................... 5





<PAGE>


<PAGE>



        Section 6.01 Electricity and Water.................................. 6
        Section 6.02 Janitorial Service..................................... 6
        Section 6.03 Security............................................... 6
        Section 6.04 Bulb Replacement....................................... 6
        Section 6.05 Graphics............................................... 6

Article Seven - Insurance, Indemnity and Exculpation........................ 6

        Section 7.01 Landlord's Insurance................................... 6
        Section 7.02 Requirements of Tenant's Insurance..................... 7
        Section 7.03 Waiver of Subrogation.................................. 7
        Section 7.04 Indemnity.............................................. 8

Article Eight - Destruction and Restoration................................. 8

        Section 8.01 Partial Destruction and Restoration.................... 8
        Section 8.02 Total Destruction and Restoration...................... 8

Article Nine - Expropriation................................................ 8

        Section 9.01 Total Taking........................................... 8
        Section 9.02 Partial Taking......................................... 8
        Section 9.03 Award.................................................. 9

Article Ten - Assignment and Sublease....................................... 9

        Section 10.01 Prohibition of Assignment of Sublease................. 9
        Section 10.02 Permitted Assignments................................. 9
        Section 10.03 Prohibition of Involuntary Assignments................ 9
        Section 10.04 Assignment by Landlord................................ 9
        Section 10.05 Changes in Corporate Ownership........................10

Article Eleven - Subordination and Estoppel................................ 10

        Section 11.01 Subordination.........................................10
        Section 11.02 Estoppel Certificates.................................10

Article Twelve - Defaults and Remedies......................................11

        Section 12.01 Tenant's Default......................................11
        Section 12.02 Landlord's Remedies...................................11
        Section 12.03 Landlord's Right to Cure..............................12
        Section 12.04 Interest..............................................12
        Section 12.05 Landlord's Default....................................13


                                      -ii-




<PAGE>


<PAGE>



        Section 12.06 Limitation of Landlord's Liability....................13
        Section 12.07 Mortgagee Protection Clause...........................13

Article Thirteen - Surrender of Leased Premises.............................13

        Section 13.01 Surrender.............................................13
        Section 13.02 Holding Over..........................................13

Article Fourteen - Right of First Refusal to Purchase.......................14

        Section 14.01 Offer by Landlord.....................................14
        Section 14.02 Third Party Offer.....................................14

Article Fifteen - Miscellaneous.............................................14

        Section 15.01 Approval of Lease by Mortgagee........................14
        Section 15.02 Notices...............................................14
        Section 15.03 Non-Waiver............................................15
        Section 15.04 Force Majeure.........................................15
        Section 15.05 Entire Agreement......................................15
        Section 15.06 Captions..............................................15
        Section 15.07 Successors and Assigns................................15
        Section 15.08 Severability..........................................16
        Section 15.09 Governing Law.........................................16


                                      -iii-




<PAGE>


<PAGE>



                             INDEX OF DEFINED TERMS

Applicable Laws............................................................. 4

Authorized Representative................................................... 5

Base Rent................................................................... 3

Basic Annual Rental......................................................... 2

Commencement Date........................................................... 2

Date of Taking.............................................................. 8

Event of Default............................................................11

Landlord.................................................................... 1

Leased Premises............................................................. 1

Lease Term.................................................................. 2

Movables.................................................................... 1

Real Property Taxes......................................................... 3

Rentable Area............................................................... 1

Rules and Regulations....................................................... 4

Tenant...................................................................... 1

Termination Date............................................................ 2





<PAGE>


<PAGE>



                                 LEASE AGREEMENT

     This lease agreement is made and entered into this ___ day of April, 1985,
by and between General Jackson Partnership, a Louisiana general partnership
domiciled in Tangipahoa Parish, whose permanent mailing address is 1518 Martens
Drive, Hammond, Louisiana 70401 (the "Landlord") and Zapata Haynie Corporation,
a Virginia corporation, whose permanent mailing address is Post Office Box 2868,
Hammond, Louisiana 70404 (the "Tenant").

                                   ARTICLE ONE
                                 LEASED PREMISES

         SECTION 1.01 DESCRIPTION. Landlord leases to Tenant the land and
building and parking facility described in Exhibit "A" to this Lease (the
"Leased Premises").

     SECTION 1.02 RENTABLE AREA. The term "Rentable Area" shall refer to all
floor areas of the Building measured from the exterior of the outer wall of the
Building to the exterior of the opposite outer wall including mechanical and
electrical roms, service areas, stairwells, elevator shafts, flues, vents,
stacks, pipe shafts and vertical ducts.

     SECTION 1.03 CONSTRUCTION OF LEASED PREMISES. Landlord and Tenant
acknowledge that as of the date hereof, the improvements of which the Leased
Premises are a part have not been constructed. The Building which shall comprise
a portion of the Leased Premises shall be a two-story office building containing
approximately 17,000 square feet of Rentable Area and related surface parking
area and landscaping, which Landlord hereby agrees to construct on the land
described in Exhibit "A" in accordance with the Plans and Specifications of
Dietz, Prince, Fischrupp, Architects, Mobile, Alabama, which are to be submitted
to and approved by the Tenant. The plans may be modified from time to time, by
joint consent in writing of Landlord and Tenant. The Building shall be
constructed by contractor selected by Landlord and pursuant to the provisions of
Exhibit "B" of this Lease.

     SECTION 1.04 OWNERSHIP OF MOVABLES. Tenant may remove its trade fixtures,
office supplies, and movable office furniture and equipment not attached to the
Building (hereinafter called "Movables") provided: (a) such removal is made
prior to the termination of the term of this Lease; (b) Tenant is not in default
of any obligation or covenant under this Lease at the time of such removal; and
(c) Tenant promptly repairs all damage caused by such removal. If Tenant does
not remove such Movables prior to surrender of the Leased Premises, then in
addition to its other remedies granted under this Lease, Landlord may have such
Movables removed and all resulting damages to the Leased Premises or Building
repaired at Tenant's expense. Such Movables will automatically become the
property of Landlord upon termination of this Lease and may be disposed of as
Landlord determines, and Tenant shall not have any right to reimbursement
therefore. All other property on the




<PAGE>


<PAGE>


Leased Premises and any alteration or addition to the Leased Premises (including
wall-to-wall carpeting, paneling or other wall covering) and any other article
attached or affixed to the floor, wall or ceiling of the Leased Premises shall
become the property of Landlord and shall remain upon and be surrendered with
the Leased Premises as a part thereof at the termination of this Lease, Tenant
hereby waiving all rights to payment of compensation therefor.

     SECTION 1.05 PARKING. Tenant shall have the right to park automobiles in
the parking areas to be constructed by Landlord without additional charge.
Landlord shall not be held responsible for any loss of property or injury to any
person parking an automobile on the Leased Premises.

     SECTION 1.06 BUILDING NAME. The name of the building shall be acceptable
and reflect the identity of Tenant, and shall not be changed without the prior
written consent of Tenant.

     SECTION 1.07 SUPPLEMENTARY AGREEMENT. Within thirty (30) days after the
Commencement Date, Landlord and Tenant shall execute an agreement supplementary
hereto setting forth: the Commencement Date, the Termination Date, the Rentable
Area of the Building, the Basic Annual Rental based upon the Rentable Area.

                                   ARTICLE TWO
                                      TERM

     SECTION 2.01 LEASE TERM. This Lease shall be in effect for a term of 180
months (the "Lease Term") commencing on the 180th day after the date on which
Landlord receives Tenant's written approval of the final plans and
specifications for the Building or the date on which Tenant takes occupancy of
the Leased Premises, whichever date is the first to occur (the "Commencement
Date") and expiring 180 months thereafter unless sooner termination as provided
herein or by law (the "Termination Date").

     SECTION 2.02 INABILITY TO DELIVER POSSESSION. If for any reason the Leased
Premises are not ready for occupancy by the date occurring 180 days after the
date on which Landlord receives from Tenant written approval of final plans and
specifications for the Building, Landlord shall be liable for all additional
costs and expenses of Tenant incurred as a result thereof, provided, however,
that any delay caused by Tenant or by force majeure (as defined in Article 15.04
below) shall serve to extend the 180 day period, on a day-for-day basis.

                                  ARTICLE THREE
                                      RENT

     SECTION 3.01 BASE RENT. Tenant shall pay to Landlord Basic Annual Rental
for the Leased Premises a sum equal to the amount calculated as follows:


                                       -2-




<PAGE>


<PAGE>



                                             Basic Annual Rental
                                             Per Square Foot
                Lease Years                  of Rentable Area
                -----------                  -------------------

                   1-3                           $10.35
                   4-6                            11.28
                   7-9                            12.30
                  10-12                           13.41
                  13-15                           14.62

Basic Annual Rental shall be payable in monthly installments in the amount of
1/12 of the Basic Annual Rental in advance on the first day of each month
beginning on the Commencement Date. Monthly installments of Basic Annual Rental
is referred to herein as "Base Rent." If the Commencement Date is not the first
day of the month, the Base Rent for the remainder of that month will be pro
rated at the rate of 1/30 of the Base Rent per day. All rent shall be paid to
Landlord at c/o Southern States Management Corporation, Post Office Box 54601,
New Orleans, Louisiana 70134, or at such other address as Landlord shall notify
Tenant in writing.

     SECTION 3.02 REAL PROPERTY TAXES AND ADJUSTMENTS. In addition to the
payment of Base Rent, Tenant shall be responsible for the payment of all taxes
and general and special assessments ("Real Property Taxes") against the Leased
Premises, provided that Tenant shall be advised by Landlord of the amount of
Real Property Taxes at least 20 days prior to the date of such Real Property
Taxes become delinquent. Tenant shall pay such amounts to Landlord at least 7
days prior to the date such Real Property Taxes become delinquent provided,
however, that Landlord shall in all events give Tenant reasonable opportunity to
require Landlord to contest the amount of such Real Property Taxes, at the sole
cost and expense of Tenant. Tenant shall be responsible for paying the ad
valorem taxes on its personal property and the value of Tenant Improvements to
the extent that such improvements are assessed separately from the Building. If
at any time during the Term the present method of taxation shall be changed so
that the whole or any part of the taxes, assessments, levies, impositions or
charges now levied, assessed or imposed on real estate improvements shall be
discontinued and in whole or partial substitution therefor, taxes, assessments,
levies, impositions or charges shall be levied, assessed, and or imposed wholly
or partially as a capital levy or otherwise on the rents received from such real
estate or the rents reserved herein or any part thereof, then such substitute
taxes, assessments, levies, impositions or charges, to the extent so levied,
assessed or imposed, shall be deemed to be an obligation of Tenant.

     SECTION 3.03 NET LEASE. Except as herein otherwise expressly provided,
Landlord shall not be required to make any expenditure, incur any obligation, or
incur any liability of any kind whatsoever in connection with this Lease or the
maintenance, operation or repair of the Building, provided, however, that
Landlord shall have the obligation to pursue warranty and other claims against
the contractor at Tenant's request. It is expressly


                                       -3-




<PAGE>


<PAGE>


understood and agreed that, except as herein otherwise expressly provided, this
is a complete net lease intended to assure Landlord the rentals herein reserved
on an absolute basis. Unless otherwise agreed or as expressly provided in this
Lease, under no circumstances or conditions, whether now existing or hereafter
arising, or whether or not beyond the present contemplation of the parties,
shall Landlord be expected or required to make any payment of any kind
whatsoever with respect to the Leased Premises.

                                  ARTICLE FOUR
                                USE AND OPERATING

     SECTION 4.01 PERMITTED USES. Tenant shall use the Leased Premises for the
purpose of a business office and for no other purpose.

     SECTION 4.02 PROHIBITED ACTIVITIES. Tenant's use of the Leased Premises
shall be limited by the following:

          A.   Cancellation of Insurance or Increase in Rates. Tenant shall not
               do, bring or keep anything in or about the Leased Premises that
               will cause an increase in the rate of any insurance premium or
               cancellation of any insurance policy covering the building.

          B.   Waste and Nuisance. Tenant shall not use the Leased Premises in
               any manner that will constitute waste, nuisance or unreasonable
               annoyance to other tenants in the building.

     SECTION 4.03 COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Tenant shall
comply with all laws and ordinances with respect to the Leased Premises. Tenant
shall comply with all rules and regulations (the "Rules and Regulations")
promulgated by Landlord with respect to Tenant's use of the Leased Premises
which rules and regulations are attached hereto as Exhibit "C." Tenant's failure
to comply with any laws respecting its use of the Leased Premises or to comply
with any rules or regulations shall be an event of default.

     SECTION 4.04 LANDLORD'S ENTRY ON PREMISES. Landlord or its authorized
representatives shall have the right to enter the Leased Premises at all
reasonable times during the term of this Lease upon advance notice to and
consent of Tenant which consent shall not be unreasonably withheld or delayed
for the purposes of (a) inspecting, maintaining, restoring or performing any of
Landlord's obligations under this Lease; (b) showing the Leased Premises to
prospective brokers, agents, buyers, tenants or persons interested in the
acquisition of the building or the Leased Premises; and (c) posting any notices
required or allowed under this Lease. Landlord shall use all reasonable efforts
to minimize interference or disruption of Tenant's business, and so long as all
such reasonable efforts are used, Landlord shall not be liable for any losses
resulting from such entry and Tenant shall not be entitled to any reduction or
abatement of rent.


                                       -4-




<PAGE>


<PAGE>



     SECTION 4.05 PEACEFUL POSSESSION. Landlord covenants and agrees, provides
Tenant performs its obligations under this Lease, to take all necessary steps to
secure and maintain for the benefit of Tenant the quiet and peaceful possession
of the Leased Premises.

     SECTION 4.06 TENANT'S COMPLIANCE WITH LAWS. Tenant, at its expense, shall
comply with any valid and applicable laws, rules, orders, ordinances,
regulations and other requirements, present or future (collectively "Applicable
Laws"), affecting the Leased Premises that are promulgated by any governmental
authority or agency having jurisdiction over the Leased Premises and with any
reasonable requirements of the insurance companies insuring Landlord against
damage, loss or liability for accidents in or connected with the Leased
Premises. Tenant may, at its expense (and, if necessary, in the name of but
without expense to, Landlord) contest, by appropriate proceedings diligently
prosecuted, the validity, or applicability to the Leased Premises, any matter it
may be required to comply with pursuant to this Section 4.06, and, to the extent
permitted by law, may postpone its compliance therewith until such contest shall
be decided. Landlord at its costs, shall install all capital investment items
required by governmental authority. The costs of such work shall be reimbursed
by Tenant to Landlord by monthly payments amortized over the reasonable life of
the capital investment item, with the reasonable life and amortization schedule
to be determined in accordance with generally accepted accounting principles.
Commencing with the first month following completion thereof, Tenant shall
reimburse Landlord in equal monthly installments in accordance with the
amortization schedule.

                                  ARTICLE FIVE
                           MAINTENANCE AND ALTERATIONS

     SECTION 5.01 MAINTENANCE. Landlord at its cost shall maintain the
structural parts of the Building including foundation and load bearing walls,
and structural bearing components of the roof. In addition Landlord shall
warrant to Tenant the structural integrity of the roof coverings and parking
facilities for a period of two years from Commencement Date.

     SECTION 5.02 TENANT'S MAINTENANCE. Except as provided above in Section
5.01, Tenant, at Tenant's sole cost, shall maintain in good condition all
portions of the Leased Premises, both exterior and interior, including without
limitation, all Tenant Improvements, personal property, the roof, mechanical and
electrical systems and equipment, elevators, signs and parking facilities
including lighting, cleaning and restriping thereof. Tenant shall be liable for
any damage to the Leased Premises resulting from the acts or omissions of Tenant
or its Authorized Representatives, licensees and invitees.

     SECTION 5.03 AUTHORIZED REPRESENTATIVES. The term, "Authorized
representative", as used in this Article and other Articles of this Lease, shall
mean any officer, agent, employee, or independent contractor retained or
employed by Landlord or Tenant, whichever is the case, acting within his actual
or apparent authority.


                                       -5-




<PAGE>


<PAGE>



     SECTION 5.04 ALTERATIONS. Tenant shall make no alterations to the Leased
Premises without the prior written consent of Landlord which approval shall not
be unreasonably withheld. Tenant shall, before making any installations,
alterations, additions or improvements, obtain all permits, approvals and
certificates required by any governmental body or agency, and certificates of
final approval thereof, and shall deliver promptly duplicates of all such
permits, approvals and certificates to Landlord. Any alterations so permitted
shall remain on and be surrendered with the Leased Premises.

     SECTION 5.05 MECHANICS LIEN. With respect to Section 5.04 above, Tenant
agrees to pay all costs for any permitted alterations and shall keep the Leased
Premises free and clear of all liens resulting from construction done by or for
the Tenant.

                                   ARTICLE SIX
                              UTILITIES AND SERVICE

     SECTION 6.01 ELECTRICITY AND WATER. Tenant shall contract directly with the
applicable public utility companies to furnish all utilities, including
electricity, water, telephone, and sewage disposal to the Leased Premises.
Tenant acknowledges that the Leased Premises will not be furnished with gas and
Landlord is hereby relieved of any obligation to provide gas to the Leased
Premises. Tenant shall pay all charges for electricity, light, heat, air
conditioning, power, telephone and other communication services, and all other
utilities and similar services rendered or supplied to the Leased Premises, and
all water rents, sewer service charges, or other similar charges levied or
charged against, or in connection with, the Leased Premises.

     SECTION 6.02 JANITORIAL SERVICE. Tenant, at its expense, shall provide for
janitorial service for the Leased Premises and shall maintain all parts of the
Leased Premises in a clean, orderly condition including the parking facilities.

     SECTION 6.03 SECURITY. Tenant hereby relieves Landlord of any obligation to
provide security personnel and equipment to the Leased Premises (except such
equipment as required by plans and specifications approved by Tenant for initial
construction of the Building). Landlord shall not be held liable for any loss by
theft or personal injury to Tenant or any other person (unless caused by
negligence or wilful misconduct of Landlord or Landlord's representative), and
Tenant agrees to indemnify Landlord in the event Landlord is held liable for
acts other than those caused by negligence or wilful misconduct of Landlord or
Landlord's representative.

     SECTION 6.04 BULB REPLACEMENT. Tenant shall be responsible for replacement
of all fluorescent and incandescent bulbs in the Leased Premises. At Tenant's
request Landlord shall provide such service at Tenant's expense.

     SECTION 6.05 GRAPHICS. Landlord shall provide and install upon Tenant's
request and at Tenant's expense, all identification signs and other graphics to
be used on the Leased


                                       -6-




<PAGE>


<PAGE>



Premises, and no other shall be used or permitted on the exterior of the Leased
Premises without the written approval of Landlord and Tenant.

                                  ARTICLE SEVEN
                      INSURANCE, INDEMNITY AND EXCULPATION

     SECTION 7.01 LANDLORD'S INSURANCE. Tenant shall maintain at Tenant's
expense the following coverage with a solvent insurance carrier authorized to do
business in Louisiana:

          A.   Fire and Extended Coverage on Building. Fire and extended
               coverage insurance with vandalism and malicious mischief
               endorsement on the Building (excluding Tenant's improvements) in
               an amount equal to ninety percent (90%) of the full replacement
               value of the Building and any payments made pursuant to this
               insurance policy shall be made solely to Landlord, or, at
               Landlord's request, to Landlord and to its mortgagee.

          B.   Fire Insurance on Tenant Improvements. All risk coverage of all
               Tenant Improvements, personal property, including movable trade
               fixtures and alterations.

          C.   Liability. A policy of comprehensive general liability insurance
               which shall afford minimum protection of not less than
               $1,000,000.00 for personal injury or death for any one occurrence
               and of not less than $500,000.00 for property damage in any one
               occurrence.

          D.   Business Interruption Insurance. A policy of business
               interruption insurance insuring that the Base Rent will be paid
               to Landlord for a period up to one year if the Leased Premises
               are destroyed or rendered inaccessible by a risk insured against
               by a policy of standard fire and extended coverage insurance,
               with vandalism and malicious mischief endorsements. Payments made
               pursuant to this insurance coverage shall be made solely to
               Landlord, at Landlord's request, to Landlord and its mortgagee.

     SECTION 7.02 REQUIREMENTS OF TENANT'S INSURANCE. Each such policy shall be
in form and content, and issued by solvent and responsible insurers, acceptable
to the Landlord and the Landlord's first mortgagee and shall name the Landlord
and any mortgagee of the Premises as additional named insureds as their
interests may appear. The aforesaid policies shall contain an endorsement
providing that the insurers under such policies shall notify the Landlord and
the Landlord's first mortgagee in writing at least thirty (30) days prior to any
material change or cancellation thereof. The Tenant shall furnish to the
Landlord copies of all such policies and shall provide written evidence of the
continuation of such policies not less than ten (10) days prior to their
respective expiry dates. The cost or premium for each


                                       -7-




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<PAGE>



and every such policy shall be paid by the Tenant. The Tenant agrees that if the
Tenant fails to take out or keep in force such insurance, the Landlord will have
the right (but not the obligation) to do so (which shall impose no liability
upon the Landlord) and to pay the premium thereof, and in such event the Tenant
shall repay to the Landlord within five (5) days after receipt of Landlord's
invoice, as Rent, the amount paid as premiums.

     SECTION 7.03 WAIVER OF SUBROGATION. Each insurance policy required by this
Lease shall include a waiver of subrogation clause by which the insurance
company waives all right of recovery by way of subrogation against the other
party in connection with any damage covered by any policy. Neither party shall
be liable to the other for any damage caused by fire or any of the risks insured
under any insurance policy required by this Lease.

     SECTION 7.04 INDEMNITY. Tenant shall hold Landlord harmless for all damages
arising out of any injury to personal property on or about the Leased Premises
including but not limited to any vices or defects in the Leased Premises. Except
Landlord shall be liable to Tenant for damage resulting from the negligent acts
or omissions of Landlord or its Authorized Representatives. Landlord shall hold
Tenant harmless for all damages arising out of any such damage. Each party's
obligations under this Section to indemnify and hold harmless the other party
shall be limited to the sum that exceeds the amount of insurance proceeds, if
any, received by the party being indemnified.

                                  ARTICLE EIGHT
                           DESTRUCTION AND RESTORATION

     SECTION 8.01 PARTIAL DESTRUCTION AND RESTORATION. If the Leased Premises
are partially destroyed by fire or other casualty, Landlord shall restore the
Leased Premises to their former condition and the Base Rent shall be reduced in
proportion to the rentable area rendered untenantable until the Leased Premises
are restored to a tenantable condition. However, Landlord's obligation to
restore is conditioned upon Landlord's receipt of sufficient insurance proceeds
to fully pay for such work. Otherwise Landlord may cancel this Lease upon 30
days written notice to Tenant.

     SECTION 8.02 TOTAL DESTRUCTION AND RESTORATION. If the Leased Premises are
totally destroyed by fire or other casualty, Landlord shall rebuild the Leased
Premises in accordance with the plans and specifications originally approved by
Landlord and Tenant for initial construction of the Leased Premises and Landlord
shall deliver occupancy thereof to Tenant within 270 days from the date of
destruction; provided, however, Landlord's obligation to restore shall be
conditioned upon Landlord's receipt of sufficient insurance proceeds to fully
pay for such cost of construction and provided that Landlord's lender shall make
the insurance proceeds available for reconstruction. If Landlord's lender does
not make insurance proceeds available, Landlord will use reasonable efforts to
obtain comparable financing and if such financing is not then available to
Landlord this Lease shall terminate. Tenant's obligation to pay rent shall abate
as of the date of destruction until the day on which Tenant shall reassume
occupancy. Notwithstanding the foregoing provisions, if total


                                       -8-




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<PAGE>



destruction occurs within the last thirty-six (36) months of the lease term,
Landlord shall have the option to terminate this Lease by giving written notice
thereof within sixty (60) days following the date of destruction.

                                  ARTICLE NINE
                                 EXPROPRIATION

     SECTION 9.01 TOTAL TAKING. If all the Leased Premises is condemned or
expropriated this Lease shall terminate as of the date title to the building or
Leased Premises is transferred (the "Date of Taking"), and all rent will be
abated as of the Date of Taking.

     SECTION 9.02 PARTIAL TAKING. If less than twenty-five percent (25%) of the
rentable area of the Leased Premises is condemned or expropriated this Lease
shall not terminate but the rent shall be reduced from the Date of Taking in
proportion to the rentable area so taken. If twenty-five percent (25%) or more
of the rentable area of the Leased Premises is taken, Tenant has the option of
terminating this Lease by giving Landlord written notice thereof within thirty
(30) days of the Date of Taking and all rent will be abated as of the Date of
Taking. If Tenant elects to continue this Lease by not giving the notice
provided for above, the Base Rent shall be reduced from the Date of Taking in
proportion to the rentable area so taken.

     SECTION 9.03 AWARD. The award shall belong to and be paid to Landlord,
except that Tenant shall receive from the award a sum attributable to the
remaining value of Tenant's leasehold interest and the value of any Tenant
Improvements or alterations which Tenant has the right to remove from the Leased
Premises pursuant to the provisions of this Lease but elects not to remove.

                                   ARTICLE TEN
                             ASSIGNMENT AND SUBLEASE

     SECTION 10.01 PROHIBITION OF ASSIGNMENT AND SUBLEASE. Tenant shall not
voluntarily assign or encumber its interest in this Lease or in the leased
Premises or sublease all or any part of the Leased Premises or allow any other
person to occupy or use all or any part of the Leased Premises without first
obtaining Landlord's written consent which consent shall not be unreasonably
withheld. Any assignment, encumbrance or sublease without Landlord's consent
shall be voidable by Landlord and shall constitute an event of default by Tenant
under this Lease and Landlord shall have the right to terminate this Lease. Any
requests for permission to assign or sublet must be made in writing at least
thirty (30) days prior to the date of the proposed assignment or sublease.

     SECTION 10.02 PERMITTED ASSIGNMENTS. Within fifteen (15) days after
Landlord's receipt of all relevant information regarding Tenant's proposed
assignee or sublessee, including financial strength, guaranties (if any), and
all economic and other terms of the proposed assignment or sublease, Landlord
shall either grant or deny its consent, or


                                       -9-




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<PAGE>



Landlord may elect to cancel this Lease and enter into a lease directly with the
proposed assignee or sublessee. If Landlord fails to respond in writing to
Tenant no later than the third day following expiration of the fifteen (15) day
period, Landlord shall be deemed to have consented to the proposed assignment or
sublease.

     SECTION 10.03 PROHIBITION OF INVOLUNTARY ASSIGNMENTS. No interest of Tenant
in this Lease shall be assignable by operation of law including but not limited
to any transfer of this Lease by will or intestacy, bankruptcy of Tenant,
execution levy of a writ of attachment or execution on this Lease, which is not
released within thirty (30) days of Tenant's actual knowledge thereof; or any
circumstance in which a receiver for Tenant or its assets is appointed with
authority to take possession of the Leased Premises. Any involuntary assignment
shall constitute an event of default by Tenant and Landlord shall have the right
to elect to terminate this Lease in which event this Lease shall not be treated
as an asset of Tenant.

     SECTION 10.04 ASSIGNMENT BY LANDLORD. If Landlord sells or transfers all or
any portion of the Building, other improvements, and land on which the Building
is located, Landlord, on consummation of the sale or transfer, shall be released
from all obligations thereafter accruing under this Lease provided that
Landlord's successor shall assume such obligations.

     SECTION 10.05 CHARGES IN CORPORATE OWNERSHIP. If at any time during the
Lease Term the person or persons who owns a majority of its voting shares at the
time of the execution of this Lease cease to own a majority of shares, Tenant
shall so notify Landlord, who may require the guaranty of the purchasing entity
if the net worth of Tenant six months after the date of such purchase is less
than 80% of Tenant's net worth as of September 30, 1984.

                                 ARTICLE ELEVEN
                           SUBORDINATION AND ESTOPPEL

     SECTION 11.01 SUBORDINATION. Tenant agrees that, upon the request of
Landlord made in writing, Tenant shall substitute this Lease to any mortgage,
land or ground lease which may now or hereafter encumber the Leased Premises, or
any part thereof, and to all renewals, modifications, consolidations,
replacements and extensions thereof. Tenant, upon request, shall execute and
deliver any documents or instruments which may be required by any lender or
ground lessor to effectuate any subordination. If Tenant fails to execute and
deliver any such documents or instruments, Tenant irrevocably constitutes and
appoints Landlord as Tenant's special attorney-in-fact to execute and deliver
any such documents or instruments.

     SECTION 11.02 ESTOPPEL CERTIFICATE. Either party shall, upon request by the
other party, execute and deliver to the requesting party a written declaration
in recordable form:


                                      -10-




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<PAGE>



          (1)  ratifying the Lease (unless the Lease has expired or been
               terminated pursuant to the provisions hereof);

          (2)  expressing the Commencement and Termination Date thereof;

          (3)  certifying, if such be the case, that this lease is in full force
               and effect and has not been assigned, modified, supplemented or
               amended (except by such writings as shall be stated) or stating
               the reason that this Lease is not in full force and effect;

          (4)  that all conditions under this Lease to be performed by the
               requesting party have been satisfied or stating those that have
               not been performed;

          (5)  that there are no defenses or offsets against the enforcement of
               this Lease by the requesting party, or stating those claimed by
               the party making the declaration;

          (6)  the amount of advance rental, if any (or none of such is the
               case), paid by Tenant;

          (7)  the date to which rental has been paid; and

          (8)  the amount of security deposited with Landlord.

Such declaration shall be executed and delivered by either party from time to
time as may be requested by the other party. Landlord's mortgage lenders and/or
purchasers shall be entitled to rely upon a declaration by Tenant made pursuant
to this Section.

                                 ARTICLE TWELVE
                              DEFAULTS AND REMEDIES

     SECTION 12.01 TENANT'S DEFAULT. The occurrence of any of the following
shall constitute a default by Tenant (an "Event of Default"):

          A.   Failure to pay Base and/or Additional Rent when due, if the
               failure continues for twelve (12) days after notice has been
               given to Tenant.

          B.   Abandonment of the Leased Premises for thirty (30) consecutive
               days.

          C.   Failure to perform any other obligation of this Lease if the
               failure to perform is not cured within thirty (30) days after
               notice has been given to Tenant or if the default cannot be cured
               within the thirty (30) day period, Tenant fails to commence to
               cure the default within that time.


                                      -11-




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          D.   If Tenant's interest in this Lease or in the Leased Premises if
               transferred or evolves upon any other person except as permitted
               under Section 10.01.

          E.   If Tenant files a petition in bankruptcy or insolvency or for
               reorganization under any state or federal law, or, if involuntary
               proceedings under any such law are instituted against Tenant or
               if a receiver or trustee is appointed for all or part of Tenant's
               property and is not vacated or dismissed within sixty (60) days
               after such institution or appointment.

     SECTION 12.02 LANDLORD'S REMEDIES. In the Event of Default by Tenant,
Landlord shall have the following remedies. These remedies are not exclusive but
are cumulative in addition to any other remedies now or later allowed by law
except as specifically provided in sub-section (C) of this Section 12.02.

          A.   Remedies where Tenant's Right to Possession is Terminated.
               Landlord may elect to terminate Tenant's right to possession of
               the Leased Premises by notice to Tenant at any time following an
               Event of Default. Upon termination, Landlord shall have the right
               to recover from Tenant the sum of:

               (1)  The unpaid rent accrued as of the date of termination of the
                    Lease or judicial dissolution of the Lease, whichever is
                    later, plus interest and late charges accrued pursuant to
                    Section 12.04.

               (2)  All legal expenses including reasonable attorneys' fees and
                    court costs incurred or paid by Landlord in effecting
                    re-entry or repossession of the Leased Premises upon
                    prosecuting any related action against Tenant.

               (3)  All reasonable costs incurred or paid by Landlord in
                    restoring the Leased Premises to good order and condition.

               (4)  All reasonable costs incurred or paid by Landlord in
                    altering, decorating or preparing the Leased Premises for
                    reletting.

               (5)  All reasonable costs including brokerage commissions
                    incurred or paid by Landlord in reletting the Leased
                    Premises.

               (6)  Such amount as may be necessary, when added to rent
                    collected by Landlord following reletting, to compensate
                    Landlord for amounts of rent otherwise not received.


                                      -12-




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                    Notwithstanding the foregoing, nothing contained in this
                    Article 12 shall be construed to limit Landlord's right to
                    indemnification with respect to liability arising out of
                    personal injury or property damage as otherwise provided in
                    this Lease.

          B.   Landlord's Remedies Where Tenant's Rights to Possession is Not
               Terminated. If Tenant is in default hereunder, but does not
               abandon the Leased Premises, Landlord may elect not to terminate
               this Lease as hereinabove provided, in which event this Lease
               shall continue in full force and effect and Landlord may exercise
               any and all rights of Landlord to the maximum extent permitted by
               law to recover all amounts then in default and to accelerate all
               future rent for the unexpired term of the Lease and to recover
               from Tenant all costs and expenses including reasonable
               attorneys' fees incurred or paid by Landlord in connection with
               the enforcement of its rights, and all damages necessary to fully
               compensate Landlord for the detriment proximately caused by
               Tenant's failure to perform its obligations hereunder.

          C.   Landlord's Remedies if Tenant Abandons. If Tenant abandons the
               Leased Premises, Landlord may elect to terminate this Lease upon
               5 days prior written notice to Tenant and reserve all rights to
               collect past due rent and charges which may have accrued
               hereunder including attorney fees and costs. Cancellations of
               this Lease and collection of past due rents, if any, shall be
               Landlord's sole remedy if Tenant abandons the Leased Premises.

     SECTION 12.03 LANDLORD'S RIGHT TO CURE. Landlord, at any time after the
occurrence of an Event of Default, may cure the default at Tenant's cost and any
sums paid or advanced by Landlord for such purpose shall be considered as
Additional Rent and are due immediately by Tenant to Landlord when advanced or
paid.

     SECTION 12.04 INTEREST. Any sums owed by Tenant to Landlord which are not
paid when due shall accumulate interest from the date due until paid at an
annual rate equal to the lesser of the prime commercial rate announced from time
to time by Citibank, N.A. plus two percent (2%) or the maximum rate permitted by
law.

     SECTION 12.05 LANDLORD'S DEFAULT. If Landlord fails or refuses to perform
any of Landlord's obligations hereunder, Tenant shall give Landlord written
notice thereof and Landlord shall not be considered to be in default hereunder
unless Landlord fails to cure the default within 30 days after its receipt of
Tenant's written notice. If the default cannot reasonably be cured within the 30
day period, but if Landlord commences action to cure the default within the 30
day period Landlord shall not be deemed to be in default hereunder so long as
Landlord thereafter diligently and in good faith continues to cure the


                                      -13-




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<PAGE>



default. If Landlord should become in default under any of its obligations
hereunder, Tenant shall be entitled to all remedies provided by law.

     SECTION 12.06 LIMITATION OF LANDLORD'S LIABILITY. Tenant specifically
agrees that if Landlord defaults under this Lease or is in any way liable to
Tenant for any cause arising from this Lease except for the liability which may
arise under Section 2.02 and Tenant consequently recovers a money judgement
against Landlord, the judgement shall be satisfied only out of the proceeds of
the sale realized on execution of the judgement and levied against the right,
title and interest of the Landlord in the Leased Premises or the building or
land on which the building is located and out of rent or other income from such
real property receivable by Landlord. Neither Landlord nor any of the partners
comprising the partnership designated as Landlord shall be personally liable for
any deficiency, except for the liability which may arise under Section 2.02.

     SECTION 12.07 MORTGAGEE PROTECTION CLAUSE. Tenant agrees to give any
mortgagee, by registered mail, a copy of any notice of default served upon the
Landlord. Tenant further agrees that if Landlord shall have failed to cure such
default within the time provided in Section 12.05, then Mortgagee shall have an
additional thirty (30) days within which to cure such default, or if such
default cannot be cured within that time, then such additional time as may be
necessary, if within such additional thirty (30) days mortgagee commences and
thereafter diligently pursues the remedies necessary to cure such default
including but not limited to commencement of foreclosure proceedings if
necessary to effect such cure.

                                ARTICLE THIRTEEN
                          SURRENDER OF LEASED PREMISES

     SECTION 13.01 SURRENDER. Upon the Termination Date of this Lease or the
cancellation of this Lease for any other cause, Tenant agrees to surrender the
Leased Premises and all Tenant Improvements to Landlord in good condition,
ordinary wear and tear excepted.

     SECTION 13.02 HOLDING OVER. Tenant shall pay as stipulated damages two (2)
times the rent per day for each day that Tenant fails to surrender the Leased
Premises as required in Section 13.01. Any failure by Tenant to surrender the
Leased Premises shall not be construed as a reconduction of this Lease unless
Landlord so authorizes. If Tenant fails to surrender the Leased Premises as
required in Section 13.01, Tenant shall hold Landlord harmless from all damages
resulting therefrom, including, without limitation, claims made by succeeding
tenant.

                                ARTICLE FOURTEEN
                       RIGHT OF FIRST REFUSAL TO PURCHASE

     SECTION 14.01 OFFER BY LANDLORD. If Landlord should elect to sell the
Leased Premises or a part thereof during the Lease Term, Landlord shall given
written notice to the


                                      -14-




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<PAGE>



Tenant of the price and terms upon which Landlord proposes to sell. Within
fifteen (15) days from receipt of Landlord's notice, Tenant shall notify
Landlord of Tenant's intention to purchase the property which may have been
offered for sale. If Tenant should accept Landlord's offer, the act of sale
shall be passed at the place and within the time period set forth in Landlord's
offer and if such offer does not specify a place of closing or date of closing,
then the act of sale shall be closed in the office of Landlord on or before
thirty (30) days from the date on which Landlord shall have received Tenant's
written notice of the acceptance of Landlord's offer to sell.

     SECTION 14.02 THIRD PARTY OFFER. During the Lease Term, Landlord shall not
accept any offer from a bona fide third person to purchase the Leased Premises,
or a part thereof, without first giving Tenant written notice and a complete
copy of such third party offer. Upon Tenant's receipt of the notice and copy of
the offer, Tenant shall have the first option for a period of fifteen (15) days
from Tenant's receipt thereof to purchase the property at the same price and
upon the same terms and conditions as offered to Landlord.

                                 ARTICLE FIFTEEN
                                  MISCELLANEOUS

     SECTION 15.01 APPROVAL OF LEASE BY MORTGAGEE. Tenant acknowledges and
agrees that this Lease is subject to the prior approval of the issuer of a
mortgage loan commitment to provide financing to the Landlord for construction
of the Building and other improvements for the Leased Premises secured by a
mortgage on the Leased Premises and a collateral pledge and assignment of this
Lease. If approval of this Lease is so required and is not granted within 60
days from the date of this Lease, and if Tenant is unwilling to amend this Lease
to satisfy the Lender's objections, then the Landlord may cancel and terminate
this Lease at any time thereafter by notice to the Tenant, provided that such
approval has not been granted prior to such notice. If such cancellation notice
is given or if this Lease is rejected by such mortgagee or insurer, then this
Lease shall be deemed canceled and neither the Landlord nor the Tenant shall
have any further liability of any nature whatsoever under this Lease.

     SECTION 15.02 NOTICES. Any notice to Landlord or Tenant required or
permitted by this Lease shall be deemed effective only if in writing and
delivered personally, or if mailed by United States registered or certified
mail, return receipt requested or when sent by national commercial courier
service for next day delivery, to be confirmed in writing by such courier, and
addressed as follows:

                   To Landlord:

                         General Jackson Partnership
                         c/o Maurin-Ogden, Inc.
                         1513 Martens Drive
                         Hammond, Louisiana 70401


                                      -15-




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<PAGE>



                   To Tenant:

                         Zapata Haynie Corporation
                         Post-Office Box 2368
                         Hammond, Louisiana 70404

Either party may by written notice change the address to

     SECTION 15.03 NON-WAIVER. Failure of either party to declare any default
immediately upon occurrence thereof, or delay in taking any action in connection
therewith, shall not waive such default, but such parties shall have the right
to declare any such default at any time and take such action as might be lawful
or authorized hereunder.

     SECTION 15.04 FORCE MAJEURE. If Landlord or Tenant shall be delayed or
prevented from doing or performing any act or thing required hereunder (except
payment of rent by Tenant) by reason of strikes, lock-outs, weather condition,
breakdown, accident, casualties, acts of God, labor troubles, inability to
procure materials, failure of supply, inability by the exercise of reasonable
diligence to obtain supplies, parts, employees, or necessary services, failure
of power, governmental laws, orders or regulations, actions of governmental
authorities, riots, insurrection, war or other causes beyond the reasonable
control of the party required to perform, or for any cause due to any act or
neglect of the other party, its servants, agents, employees, licensees, or any
person claiming by, through or under the other party (such acts or things being
referred to in this Lease as "Force Majeure"), then the party required to
perform shall not be liable or responsible for any such delays and the doing or
performance of any such act shall be extended for a period equivalent to the
period of such delay.

     SECTION 15.05 ENTIRE AGREEMENT. This Lease including the exhibits referred
to herein, contains the entire agreement between the parties and all prior
negotiations and agreements are merged into this Lease. This Lease may not
changed, modified, terminated or discharged, in whole or in party, except by a
writing, executed by the party against whom enforcement of the change,
modification, termination or discharge is to be sought.

     SECTION 15.06 CAPTIONS. The article and section headings or titles in this
Lease are inserted for convenience only and are not to be given any effect in
its construction.

     SECTION 15.07 SUCCESSORS AND ASSIGNS. The agreements and obligations
contained in this Lease shall bind and inure to the benefit of Landlord and
Tenant and their respective legal representatives, heirs, successors and
assigns. In the event that this Lease is executed by more than one tenant, all
such tenants shall be bound in solido for the payment of rent and the
performance of all obligations and agreements contained in this Lease.

     SECTION 15.08 SEVERABILITY. The unenforceability, invalidity or illegality
of any provision of this Lease shall not render the other provisions
unenforceable, invalid or illegal.


                                      -16-




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     SECTION 15.09 GOVERNING LAW. This Lease shall be governed by and construed
in accordance with the laws of the State of Louisiana.

     This Lease has been executed by Landlord and Tenant in Hammond, Louisiana
on the __ day of April, 1985.

WITNESSES AS TO LANDLORD:                GENERAL JACKSON PARTNERSHIP

                                         By:
- --------------------------------            ---------------------------------
                                            Gerald E. Songy
                                            Title: General Partner
- --------------------------------

                                         By:
                                            ---------------------------------
                                            James E. Maurin
                                            Title: General Partner

WITNESSES AS TO TENANT:                  ZAPATA HAYNIE CORPORATION

                                         By:
- --------------------------------            ---------------------------------
                                            Charles W. Beck
                                            Title: President
- ------------------------------

State of Louisiana

Parish of Tangipahoa


     On this __ day of April, 1985, before the undersigned Notary Public,
personally appeared Gerald E. Songy, who after being duly sworn, declared that
is a General Partner of General Jackson Partnership, and that he executed the
foregoing Lease on behalf of the partnership by authority of the Articles of
Partnership and acknowledges this Lease to be the free act and deed of the
partnership.

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


                                      -17-




<PAGE>


<PAGE>



State of Louisiana

Parish of Tangipahoa

     On this __ day of April, 1985, before the undersigned Notary Public,
personally appeared James E. Maurin, who after being duly sworn, declared that
is a General Partner of General Jackson Partnership, and that he executed the
foregoing Lease on behalf of the partnership by authority of the Articles of
Partnership and acknowledges this Lease to be the free act and deed of the
partnership.

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

State of Louisiana

Parish of Tangipahoa

     On this __ day of April, 1985, before the undersigned Notary Public,
personally appeared Charles W. Beck, who after being duly sworn, declared that
he is the President of Zapata Haynie Corporation, and that he executed the
foregoing Lease on behalf of the corporation by authority of its Board of
Directors and acknowledges the Lease to be the free act and deed of the
partnership.

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


                                      -18-




<PAGE>


<PAGE>


                                   EXHIBIT "A"
                         DESCRIPTION OF LEASED PREMISES

     The Leased Premises shall comprise: (a) the entire building to be
constructed in accordance with Exhibit B; (b) the parking facility to be
constructed upon the land described in (c); and (c) the following described
land:

          A certain trace or parcel of ground, together with all
          buildings and improvements thereon, and all the rights, ways,
          privileges, servitudes, appurtenances and advantages thereunto
          belonging to or in anywise appertaining, situated in the
          Parish of Tangipahoa, State of Louisiana, in that subdivision
          known as The French Quarter Subdivision and being Lots 13, 14
          and 15 of such subdivision, and being more particularly
          described according to a map of survey recorded on Conveyance
          Book 473, Page 231, official records of Tangipahoa Parish,
          Louisiana. Such tract being subject to such servitudes of
          record, including a ten (10') foot servitude along the east
          property line for utilities and drainage and further subject
          to those restrictive covenants as recorded in Conveyance Book
          510, Pages 396-399, official records of the Clerk and Recorder
          for Tangipahoa Parish, Louisiana.


                                      -19-




<PAGE>


<PAGE>



                                   EXHIBIT "B"
                      CONSTRUCTION RIDER TO LEASE AGREEMENT

     This rider is attached to and forms a part of a certain lease dated as of
April __, 1985, between General Jackson Partnership, as Landlord and Zapata
Haynie Corporation as Tenant.

     1.   Construction and Completion of Building.

          (a)  The Base Building will be constructed by Landlord substantially
               in accordance with the plans and specifications for a two-story
               office building to be prepared by Dietz, Prince & Fischrupp,
               Architects.

          (b)  All other design and construction work with respect to the
               improvements of the Leased Premises shall be referred to as
               "Tenant Improvements," and shall be at the sole cost and expense
               of Tenant, except to the extent of the contribution by Landlord,
               as provided below.

     2.   Tenant's Plans and Specifications.

          (a)  Tenant agrees to furnish complete information regarding Tenant's
               program and space planning requirements for Tenant Improvements
               to Landlord's Architect no later than April 15, 1985.

          (b)  Upon submission to Landlord's Architect of the requirements as
               described above in subparagraph (a), Landlord's Architect will
               prepare, at the sole cost and expense of Landlord, all
               architectural, mechanical and electrical engineering plans and
               specifications required for the performance of the work,
               including complete detailed working drawings and specifications
               for Tenant's partition layout, entrances, ceilings, fire
               protection, heating and air conditioning, lighting and electrical
               outlets. Tenant agrees to review and approve or "approve as
               noted" these plans and specifications within ten (10) days upon
               submission by Landlord's Architect. After approval of plans and
               specifications by Landlord and Tenant, all amendments or
               supplements thereto shall be prepared by Landlord's architect at
               the sole cost and expense of Tenant.

          (c)  It is understood and agreed that all plans, drawings and
               specifications are subject to Landlord's approval, which the
               Landlord agrees shall not be unreasonably withheld.


                                      -20-




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<PAGE>



     3.   Tenant Improvements Construction.

          (a)  The Landlord will construct Building Standard Tenant Improvements
               in and to the premises in accordance with final architectural
               construction drawings as described in Paragraph 2(b) above.
               Building Standard construction is defined as typical design and
               construction finishes, details, materials, cross-sections,
               performance ratings, and average quality allowances, which have
               been developed by the Landlord and Landlord's architects as
               representing the optimum aesthetic functional and operational
               balance with the Base Building.

          (b)  The Landlord shall execute a contract with such persons, firms or
               corporations as it, in its sole discretion, deems advisable for
               the completion of such Building Standard Improvements. Landlord
               will provide and install Building Standard Tenant Improvements
               for which Landlord's sole construction obligation is to pay to
               Landlord's Contractor the cost of construction thereof for a
               total contribution amount not to exceed $8.00 per Rentable Square
               Foot.

          (c)  If Tenant requests Landlord to perform any Building Standard
               Improvement work or custom or special Tenant Improvement work
               over and above the Landlord's contribution listed in Paragraph
               3(a) above, this work will be performed by the Landlord's
               Contractor as a "Tenant Reimbursable." The Tenant shall approve
               the written estimate of such cost of the work prior to
               commencement by the Landlord's Contractor, which approval not to
               be unreasonably withheld. If Tenant shall fail to approve any
               such estimate within ten (10) days, the same shall be deemed
               disapproved in all respects by Tenant, and Landlord's Contractor
               shall not be authorized to proceed thereon.

          (d)  The Tenant will pay the actual cost of the improvements
               represented by charges of Landlord's Contractors, less Landlord's
               contribution listed in Paragraph 3(b) above. The sums due by
               Tenant to Landlord under the provisions of this paragraph shall
               be billed from time to time and shall be paid within ten (10)
               days after demand by Landlord or its agent, but in no event later
               than the date of occupancy of the Leased Premises by Tenant.

     4.   Commencement of Rent.

          It is agreed that notwithstanding the date provided in the Lease for
the commencement of the term thereof, such term shall not commence until the
substantial completion of all Tenant Improvements as hereinabove defined, and
the termination date shall be extended for a period of time equal to the period
of any such delay in


                                      -21-




<PAGE>


<PAGE>



commencement of the term thereof; provided, however, that if Landlord shall be
delayed in substantially completing such work as a result of:

          (a)  Tenant's failure to furnish information with respect to Tenant's
               requirements for the Tenant Improvements within the time provided
               in Paragraph 2(a) above;

          (b)  Tenant's failure to approve detailed working drawings as provided
               in Paragraph 2(b) above;

          (c)  Tenant's failure to approve written cost estimate as provided in
               Paragraph 3(c) above;

          (d)  Changes by Tenant in the final plans and specifications prepared
               pursuant to Paragraph 2(b) above;

          (e)  The performance by any person, firm, or corporation (other than
               Landlord's Contractor) employed at Tenant's request and the
               completion or work by such person, firm or corporation;

          (f)  Delay of delivery of materials, finishes or installations
               requested by Tenant other than materials, finishes, and
               installations used as Building Standard items by Landlord's
               Contractors in the Building; and

          (g)  Any other delay (including, without limitation, delay in
               providing necessary approvals or disapprovals required of Tenant)
               caused by the action or inaction by Tenant;

then, in that event, the commencement of the term of such Lease and the
Landlord's obligation for the payment of rental thereunder shall be accelerated
by the number of days of such delay.

                                      General Jackson Partnership

                                      By:
                                         -------------------------------------
                                         Gerald E. Songy
                                         General Partner


                                      By:
                                         -------------------------------------
                                         James E. Maurin
                                         General Partner


                                      -22-




<PAGE>


<PAGE>



                                      Zapata Haynie Corporation


                                      By:
                                         -------------------------------------
                                         Charles W. Beck
                                         President


                                      -23-




<PAGE>


<PAGE>



                                   EXHIBIT "C"
                              RULES AND REGULATIONS

     1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or encumbered by Tenant or
used for any purpose other than ingress and egress to and from the Leased
Premises.

     2. No awnings or other projections shall be attached to the outside walls
of the building without the prior written consent of the Landlord. No curtains,
blinds, shades or screens shall be attached to, hung in, or used in connection
with any window or door of the Leased Premises without the prior written consent
of the Landlord. Such awnings, projections, curtains, blinds, shades, screens or
fixtures must be of the quality, part, design and color, and attached in the
manner approved by the Landlord.

     3. No sign, advertisement, notice or other letterings will be exhibited,
inscribed, painted or affixed by Tenant on any part of the outside or inside of
the Leased Premiss or building without the prior written consent of the
Landlord. In the event of the violation of the foregoing by Tenant, the Landlord
may remove the same without any liability and may charge the expense incurred by
such removal to the Tenant. Landlord reserves the right to install or maintain a
sign or signs on the exterior of the building.

     4. The sashes, sash doors, sky lights, windows, doors that reflect or admit
light and air into the halls, passageways, or other public places in the
building will not be covered or obstructed by Tenant, nor shall any bottles,
parcels, or other articles be placed on the window ledges.

     5. No showcase or other articles shall be put in front of or affixed on any
part of the exterior of the building nor placed in the halls, corridors, or
vestibules without the prior written consent of the Landlord.

     6. The water, wash closets, and other plumbing fixtures shall not be used
for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substance shall be thrown therein. All
damages resulting from any misuse of the fixture shall be borne by Tenant.

     7. Tenant shall not mark, paint, drill into, or in any way deface any part
of the Leased Premises or the building. No boring, cutting, or stringing of wire
shall be permitted except with the prior written consent of Landlord and as it
may direct. Tenant shall not lay linoleum, or other similar floor covering so
that the same shall come into direct contact with the floor of the Leased
Premises, and if linoleum or other similar floor covering is desired to be used,
an interlining of builder's deadening felt shall be first affixed to the floor
by a


                                      -24-




<PAGE>


<PAGE>


paste or other similar material soluble in water, the use of cement or other
similar adhesive material being expressly prohibited.

     8. No bicycles, baby carriages, birds, or animals of any kind shall be
brought into or keep in or about the Leased Premises. However, this does not
prohibit the Tenant from having coffee, soft drinks, candy and other items for
the use of Tenant's employees, servants, agents or visitors. Tenant shall not
cause or permit any unusual or objectionable odors to be produced upon or
permeate from the Leased Premises.

     9. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by Tenant nor shall any changes be made in existing locks or
mechanisms thereof, without the prior written approval of Landlord, which
approval shall not be unreasonably withheld.

     10. Tenant shall not make or permit to be made any unseemly or disturbing
noises or disturb or interfere with occupants of this or neighboring buildings
or premises or those having business with them. Tenant shall not throw anything
out of the doors, windows or skylights, or down the passageways.

     11. Tenant agrees not to place a load upon any floor of the Leased Premises
exceeding the floor load per square foot area which such floor was (and is)
designed to carry and would be allowed by law. Business machines and mechanical
equipment shall be placed and maintained by Tenant at Tenant's expense in
settings sufficient to Landlord's judgement to absorb and prevent vibration,
noise and annoyance.

     12. No space in the building shall be used for manufacturing, or for the
sale of property of any kind at auction.

     13. Tenant shall not open, or permit windows in the Leased Premises to be
opened at any time.


                                  Accepted:
                                            ---------------------------------

                                  Tenant:
                                            ---------------------------------

                                  Date:
                                            ---------------------------------


                                      -25-





<PAGE>





<PAGE>

                                      LEASE

STATE OF LOUISIANA

PARISH OF CALCASIEU

         KNOW ALL MEN BY THESE PRESENTS:

         This Lease is entered into by and between The Ardoin Limited
Partnership, a limited partnership organized and existing under the laws of the
State of Louisiana, hereinafter referred to as Lessor, and Zapata Haynie
Corporation, a corporation organized and existing under the laws of the State of
Virginia, hereinafter referred to as Lessee, both of which do mutually covenant
and agree as follows:

                              W I T N E S S E T H:

         Lessor does by these presents hereby let, lease and hire for the
purposes of processing and selling of fishmeal and oil and other seafood
products, and any other legitimate industry, for the consideration and on the
terms hereinafter recited and expressed, to and unto Lessee, who accepts for
itself the following described property, to wit:

         1.       In  Sections 33 and 34, Township 15 South, Range 10 West,
                  Cameron Parish, Louisiana, and fully described as:

                  Commencing at a point on the South line of Section 33 which is
                  North 89[d]51' East 5081.1 feet from the back corner
                  common to Sections 32 and 33, said point of beginning is also
                  North 89[d]51' East 31.1 feet from an existing 4"
                  transite pipe set on the United States Coast Guard Survey of
                  1960 and is on the right of way line of the existing ship
                  channel; thence North 2[d]55' West 1,881.57 feet along
                  the right of way line of the existing ship channel to a 1" bar
                  situated on the North line of Section 34; thence West 420.31
                  feet along the North line of Section 34 to the eastern right
                  of way line of Louisiana State Highway 27; thence South
                  3[d]59' East 2,883.33 feet along the eastern right of way
                  line of Louisiana State Highway 27 to the South line of
                  Section 33; and thence North 89[d]51' East 386.8 feet
                  along the South line of Section 33 to the point of
                  commencement.





<PAGE>


<PAGE>



         2.       In Sections 33 and 34, Township 15 South, Range 10 West,
                  Cameron Parish, Louisiana, and fully described as:

                  Commencing at a point on the western right of way line of
                  State Highway 27 which is North 3[d]59' West 307.4 feet
                  from the intersection of the South line of Section 33 and the
                  western right of way line of Louisiana State Highway 27;
                  thence North 3[d]59' West 1,575.83 feet along the western
                  right of way line of Louisiana State Highway 27 to the North
                  line of Section 34; thence West 500 feet along the North line
                  of Section 34; thence South 3[d]59' East 1,575.83 feet;
                  thence East 500 feet to the point of commencement.

         1. This Lease is made for and accepted for a primary term of ten (10)
years beginning July 1, 1992 and ending June 30, 2002.

         2. Lessee is given the option and privilege of extending this Lease for
two (2), successive ten (10) year periods beginning July 1, 2002, and ending
June 30, 2012, and beginning July 1, 2012, and ending June 30, 2022.

         3. The term "Lease Year" as hereinafter used shall refer to a twelve
(12) month period beginning July 1 of one year and ending June 30 of the next
year.

         4.       The consideration of this Lease is as follows:

                  (a)      The rent during the first five (5) year period
                           commencing July 1, 1992 through June 30, 1997, which
                           Lessee agrees to pay Lessor, shall be Fifty Thousand
                           and No/100 Dollars ($50,000.00) per year payable in
                           advance upon the execution of this Lease and annually
                           thereafter on or before the 10th day of July of each
                           year.

                  (b)      The rent during each five (5) year period thereafter,
                           during the remainder of the primary term or any
                           renewals thereafter, which Lessee agrees to pay to
                           Lessor, shall be adjusted proportionately with
                           increases in the Consumer Price Index (All Urban), as
                           hereinafter provided, but in no event shall be less
                           than Fifty Thousand and No/100 Dollars ($50,000.00)
                           per year, payable annually in advance on or before
                           the 10th day of July of each year.

                  (c)      Commencing on July 1, 1997, and on the 1st day of
                           each five (5) year period thereafter during the
                           remainder of the primary term or any renewals
                           thereafter, the rent shall be adjusted, in relation
                           to the Consumer Price Index for all items relating to
                           urban consumers compiled and published by the United
                           States Department of Labor,


                                      - 2 -




<PAGE>


<PAGE>



                           Bureau of Labor Statistics, hereinafter abbreviated
                           as "CPI," as compared to the CPI in effect as of July
                           1, 1992. The annual rent for each such five (5) year
                           period shall be calculated by dividing the CPI for
                           the Lease Year immediately preceding the five (5)
                           year period by the CPI in effect as of July 1, 1992.
                           The quotient thereof shall be multiplied by Fifty
                           Thousand and No/100 Dollars ($50,000.00), the result
                           being the annual rental payment for that particular
                           five (5) year period.

                           A similar computation will be made for each
                           subsequent five (5) year period using as the base CPI
                           for comparison, the CPI in effect as of July 1, 1992.

                           In the event that an amendment is made by the United
                           States Department of Labor, Bureau of Labor
                           Statistics in calculating the CPI hereinabove
                           referred to, or if a substantial change is made in
                           the method of establishing such CPI, then the CPI
                           shall be adjusted to the figure that would have
                           resulted had no change occurred in the manner of
                           computing such CPI. In the event that such CPI (or a
                           successor or substitute index) is not available, a
                           reliable governmental or other non-partisan
                           publication evaluating the information heretofore
                           used in determining the CPI shall be used in lieu of
                           such CPI.

                           In the event of any dispute between the parties as to
                           this manner of computing any adjustment in the annual
                           rent, or as to the CPI to be used, or as to any other
                           matter arising under this Section 3, such dispute
                           shall be determined by arbitration. During any such
                           arbitration, Lessee shall continue to pay rent at the
                           rate theretofore applicable under the terms of this
                           Lease.

         5. If Lessee fails to pay the rental provided for herein when due,
Lessor shall have the right to give Lessee notice by registered mail to pay said
rent within fifteen (15) days and if Lessee should fail to pay said rent within
fifteen (15) days after said notice then Lessor may declare this Lease canceled.

         6. Lessee shall have the right to build and erect walls, buildings and
other structures upon the leased premises and shall likewise have the right to
build slips, docks and bulkheads thereon.

         7. It is understood that Lessee may either during the term of or at the
termination of this Lease remove any and all properties from the leased
premises, except:

                  A.       Slips.


                                      - 3 -




<PAGE>


<PAGE>



                  B.       Bulkheads.

                  C.       Docks and platforms.

                  D.       Concrete or wood floors or foundations for any of the
                           buildings or structures.

It is further understood and agreed that at the termination of the Lease Lessor
shall have the right to accept any of the improvements in their then present
condition left by Lessee, or to have Lessee remove same at Lessee's expense.

         8. Lessee agrees to pay for all water, gas, electric lights and power,
telephone, sewage disposal or any other services or utility charges incurred or
used on the leased premises.

         9. Lessee shall cause all improvements placed by Lessee upon the leased
premises to be assessed to Lessee on all tax rolls, and Lessee shall pay the
taxes assessed against such improvements. Should taxes on Lessee's improvements
be assessed to Lessor, then Lessee shall reimburse Lessor for any such taxes
paid by Lessor, such reimbursements shall be made within ninety (90) days after
receipt by Lessee of notice and proof of payment of such taxes by Lessor; and
Lessee may make such reimbursement in the manner hereinabove provided for the
payment of annual rental.

         10. The Lessee further agrees that during the term of this Lease any
and all property of any kind that may be on the leased premises shall be at the
sole risk of Lessee, and Lessor shall not be liable to Lessee, its invitees or
other person for any injury, loss or damage to the property or to any person
lawfully on the premises; Lessee agrees, binds and obligates itself to indemnify
and save harmless Lessor from any and all claims, demands, suits and judgements
therefor or on account of damage or injury, including death to persons and
damage to property arising out of or connection with the operation and use of
the leased premises and any improvements installed or placed thereon by Lessee
under this agreement.

         11. If, as a result of force majeure, judgement of any court of
competent jurisdiction, or order, decree or regulation of any governmental body
or official having jurisdiction, Lessee shall be prevented from utilizing the
leased premises as a menhaden processing facility or as a marine terminal with
the right to construct, maintain and utilize dockage, wharfage and other marine
facilities upon the leased premises and in the Calcasieu River fronting and
abutting same, then Lessee shall have and hereby is given the right and
privilege to terminate this Lease without liability to Lessor for the payment of
any unpaid rent, any penalty or any other or further sum whatsoever. Any such
cancellation shall be made by Lessee within a reasonable period of time after
the occurrence of such force majeure or rendition of the judgement, or issuance
of the order, decree or regulation which shall prevent Lessee from utilizing the
leased premises for the purposes mentioned; and


                                      - 4 -




<PAGE>


<PAGE>



within such period, Lessee shall so advise Lessor in writing of the cancellation
of this Lease and the reason therefor.

         12. Any and all notices required to be or which may be given shall be
so given in writing to the following addresses:

                  To Lessor:     The Ardoin Limited Partnership
                                 c/o Mrs. Goldie Ardoin, General Partner
                                 4400 W. Prien Lake Road
                                 Lake Charles, Louisiana

                  To Lessee:     Zapata Haynie Corporation
                                 P.O. Box 2868
                                 Hammond, Louisiana 78404

         13. Lessor hereby warrants title to the leased premises, and agrees to
place and maintain Lessee in possession thereof. Lessee shall act in a
reasonable manner to safeguard the leased premises against trespassers, and at
its own expense shall evict those who profess to occupy the leased premises
adversely to Lessee or Lessor.

         14. Lessee shall have the right to sublease the whole or any part of
the leased premises or to assign this Lease in whole or in part without first
obtaining the written consent of Lessor provided Lessee is responsible for the
consideration.

         15. In the event Lessor leases said property for oil, gas or mineral
extraction, said oil, gas or mineral lease shall provide that no drilling shall
be conducted on the leased premises herein, but may be exploited through
directional drilling.

         16. Lessee covenants and agrees that it shall have full responsibility
for any violation of any applicable federal, state or parish environmental laws
and regulations which heretofore may have risen or which hereinafter may arise
by reason of its occupancy and use of the leased premises during all periods
from and after June 30, 1966 and extending through the term of this Lease, as
the same may be extended, and Lessee hereby agrees to indemnify Lessor from and
against any and all claims which may arise with respect to any alleged
violations of any such laws and regulations, including without limitation the
costs of defending against any such claim and any and all costs of remediation
which may be required as a result thereof. Lessee's obligations as set forth in
this paragraph shall survive the termination of this Lease.


                                      - 5 -




<PAGE>


<PAGE>



         IN FAITH WHEREOF, Lessee and Lessor have signed these presents in
triplicate originals in the presence of the undersigned competent witnesses
after a due reading of the whole effective as of the 1st day of July, 1992.

                                               LESSOR:

                                               The Ardoin Limited Partnership

WITNESSES:

- ---------------------------                    ---------------------------------
                                               By:      Goldie Ardoin,
                                                        General Partner

- ---------------------------

         SWORN TO AND SUBSCRIBED before me this ___ day of April, 1993.


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


                                               LESSEE:

                                               Zapata Haynie Corporation

WITNESSES:

- --------------------------                     ---------------------------------
                                               By:      Kent R. Stephenson,
                                                        Vice President

- --------------------------


         SWORN TO AND SUBSCRIBED before me this ___ day of April, 1993.

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


                                      - 6 -




<PAGE>


<PAGE>



                               CORRECTION OF LEASE

STATE OF LOUISIANA

PARISH OF CALCASIEU

         KNOW ALL MEN BY THESE PRESENTS:

         This Correction of Lease is entered into by and between The Ardoin
Limited Partnership, a limited partnership organized and existing under the laws
of the State of Louisiana, hereinafter referred to as Lessor, and Zapata Haynie
Corporation, a corporation organized and existing under the laws of the State of
Virginia, hereinafter referred to as Lessee, both of which do mutually covenant
and agree as follows:

                              W I T N E S S E T H:

         By Lease effective as of the 1st day of July, 1992, The Ardoin Limited
Partnership, as Lessor, and Zapata Haynie Corporation, as Lessee, entered into a
lease affecting the property more fully described in said Lease, which said
Lease is made a part hereof by reference thereto.

         That an error was made and committed in describing the property which
The Ardoin Limited Partnership let, leased and hired to Zapata Haynie
Corporation.

         That The Ardoin Limited Partnership and Zapata Haynie Corporation do
hereby correct the said Lease to revise the description of the property let,
leased and hired by The Ardoin Limited Partnership to Zapata Haynie Corporation
in the said Lease to read as follows, to wit:

         1.       In Sections 33 and 34, Township 15 South, Range 10 West,
                  Cameron Parish, Louisiana, and fully described as:

                  Commencing at a point on the South line of Section 33 which is
                  North 89[d]51' East 5081.1 feet from the back corner
                  common to Sections 32 and 33, said point of beginning is also
                  North 89[d]51' East 31.1 feet from an existing 4"
                  transite pipe set on the United States Coast Guard Survey of
                  1960 and is on the right of way line of the existing ship
                  channel; thence North 2[d]58' West 1,881.57 feet along
                  the right of way line of the existing ship channel to a 1" bar
                  situated on the North line of Section 34; thence West 420.31
                  feet along the North line of





<PAGE>


<PAGE>



                  Section 34 to the eastern right of way line of Louisiana State
                  Highway 27; thence South 3[d]59' East 1,883.23 feet along
                  the eastern right of way line of Louisiana State Highway 27 to
                  the South line of Section 33; and thence North 89[d]51'
                  East 386.8 feet along the South line of Section 33 to the
                  point of commencement.

         2.       In Sections 33 and 34, Township 15 South, Range 10 West,
                  Cameron Parish, Louisiana, and fully described as:

                  Commencing at a point formed by the intersection of the south
                  line of Section 33 and the western right of way line of
                  Louisiana State Highway 27; thence North 3[d]59' West
                  1,883.23 feet along the western right of way line of Louisiana
                  State Highway 27 to the North line of Section 34; thence West
                  500 feet along the North line of Section 34; thence South
                  3[d]59' East 1,883.23 feet to the South line of Section
                  33; thence East 500 feet along the South line of Section 33 to
                  the point of commencement.

         That except for correcting the description of the property subject to
the said Lease, all of the other terms, conditions, covenants, obligations and
agreements contained in the said Lease shall remain in full force and effect.

         That the sole and only purpose of this Correction of Lease is to
properly describe the property subject to the said Lease.

         IN FAITH WHEREOF, The Ardoin Limited Partnership and Zapata Haynie
Corporation have signed these presents in triplicate originals in the presence
of the undersigned competent witnesses after a due reading of the whole
effective as of the 1st day of July, 1992.

                                      LESSOR:

WITNESSES:                            THE ARDOIN LIMITED PARTNERSHIP

                                      By:
- -----------------------------            -------------------------------
                                               Goldie Ardoin
                                               General Partner
- ---------------------------





                                      - 2 -




<PAGE>


<PAGE>



         SWORN TO AND SUBSCRIBED before me this 22nd day of February, 1994.


                                      --------------------------------------
                                      Notary Public
                                     
                                      LESSEE:
                                     
WITNESSES:                            ZAPATA HAYNIE CORPORATION
                                     
                                      By:
- -----------------------------            -------------------------------
                                           Joseph L. von Rosenberg, III

- -----------------------------   

         SWORN TO AND SUBSCRIBED before me this __ day of March, 1994.

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


                                      - 3 -




<PAGE>





<PAGE>
                                 LEASE AGREEMENT


THE STATE OF LOUISIANA      )

PARISH OF ST. MARY          )


         This Lease Agreement is made and entered into this the ___ day of
__________________, 199__, by and between O.W. BURTON, JR., INDIVIDUALLY AND AS
TRUSTEE OF THE TRUST OF ANNA BURTON, hereinafter called Owner, and PROTEIN
SECURITIES COMPANY, a corporation, hereinafter called Tenant.

         In consideration of the mutual covenants and agreements herein set
forth, and other good and valuable consideration, Owner does hereby demise and
lease to Tenant, and Tenant does hereby lease from Owner, six (6) acres of
property, more or less, as described in Exhibit "A," attached hereto and
incorporated herein for all purposes, hereinafter called the "leased premises,"
under the terms and conditions hereinafter contained, on a "net-net-net lease"
basis, with Tenant obligated to pay all rentals, plus insurance, taxes and
maintenance, as hereinafter provided.

                                 ARTICLE 1. TERM

                                  TERM OF LEASE

         1.01 The term of this Lease shall commence on the _____ day of
___________, 199__ (the "Commencement Date"), and shall expire on November __,
2002, subject to the purchase option granted hereinbelow.





<PAGE>


<PAGE>



                         PRORATED RENT FOR PARTIAL MONTH

         1.02 In the event said commencement falls on other than the first day
of a month, then the Tenant shall pay a prorated rent for said partial month and
the five (5) year term of the Lease shall be adjusted to run from the first day
of the following month.

                                 ARTICLE 2. RENT

                                      RENT

         2.01 Tenant agrees to pay to Owner without any prior demand therefor
and without any deduction or set off whatsoever, the sum of one dollar ($1.00)
in advance on the first day of each calendar month of lease term. If the term
shall commence on a day other than the first day of a calendar month, then
Tenant shall pay, on the Commencement Date of the term, a pro rata portion of
the fixed monthly rent described above, prorated on a per diem basis with
respect to such fractional calendar month.

                               ARTICLE 3. BUSINESS

         Tenant may use the leased premises for any lawful use and purpose, and
will comply, and will cause its employees, agents, and invitees to comply, with
all applicable federal, state and local laws and ordinances, and with all rules
and regulations of governmental agencies, especially those dealing with
environmental quality.

                      ARTICLE 4. MAINTENANCE AND SURRENDER

                                   MAINTENANCE

         4.01 Tenant shall at its expense and risk maintain the roof,
foundation, underground or otherwise concealed plumbing, and the structural
soundness of the exterior walls (including all windows, window glass, plate
glass, and all doors) and all other parts of each


                                        2



<PAGE>


<PAGE>


building and other improvements on the leased premises in good repair and
condition, including but not limited to, repairs (including all necessary
replacements) to the interior plumbing, windows, window glass, plate glass,
doors, heating system, air conditioning equipment, fire protection sprinkler
system, and the interior and exterior of the building in general; and including
the reasonable costs of landscape maintenance, outdoor lighting and cleaning,
resurfacing, striping and maintaining all parking and service areas.
Notwithstanding anything contained in the paragraph, the condition of said
leased premises shall be maintained in the same or better condition as on the
Commencement Date of this Lease.

                                    SURRENDER

         4.02 Tenant shall throughout the lease term maintain the building and
other improvements constituting the leased premises and keep them free from
waste or nuisance, and shall deliver up the premises in a clean and sanitary
condition at the termination of this Lease in good repair and condition,
reasonable wear and tear and damage by fire, tornado, or other casualty
expected. In the event Tenant should neglect to reasonably maintain the leased
premises, Owner shall have the right, but not the obligation, to cause repairs
or corrections to be made, and any reasonable costs therefore shall be payable
by Tenant to Owner as additional rental on the next rental installment date.

                   ARTICLE 5. OBLIGATIONS OF OWNER AND TENANT

                              TAXES AND ASSESSMENTS

         5.01 (a) Tenant shall pay and fully discharge all taxes, special
assessments, and governmental charges of every character imposed during the term
of this Lease on the leased


                                        3



<PAGE>


<PAGE>



premises or any part thereof, and all improvements erected thereon. Tenant shall
pay all such taxes, charges and assessments to the public officer charged with
the collection thereof not less than fifteen (15) days before the same shall
become delinquent, and Tenant agrees to indemnify and save harmless Owner from
all such taxes, charges and assessments. Tenant shall have the right in good
faith at its cost and expense to contest any such taxes, charges and
assessments, and shall be obligated to pay the contested amount only if and when
finally determined to be due. Taxes shall be prorated for the year of the
Commencement Date.

         (b) Subject to the right of Tenant to contest taxes, special
assessments, and governmental charges, as hereinabove provided, Owner may at any
time that the payment of any items of taxes, special assessments, or
governmental charges which Tenant is obligated to pay under the provisions
hereof remains unpaid give written notice to Tenant of its default, specifying
the same, and if Tenant continues to fail to pay such item of taxes, special
assessments or governmental charges or to contest the same in good faith, then
at any time after ten (10) days from such written notice, Owner may pay the
items specified in the notice, and Tenant covenants thereupon on demand to
reimburse and pay Owner any amount so paid or expended in the payment of the
items specified in the notice, with interest thereon at the rate of ten percent
(10%) per annum from the date of such payment by Owner until paid by Tenant.
Provided, however, if Owner, without giving the requisite ten (10) days' notice
above provided for, pays any such item which has not been paid by Tenant within
the time required in subparagraph (a) above, or which has not then or


                                        4




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<PAGE>



thereafter been successfully contested by Tenant, Tenant shall nevertheless
reimburse Owner for such item, but without interest.

         (c) All taxes assessed prior to but payable in whole or in installments
after the effective date of the lease term and all taxes assessed during the
term but payable in whole or in installments after the lease term, shall be
adjusted and prorated, so that Owner shall pay its prorated share for the period
prior to and for the period subsequent to the lease term and Tenant shall pay
its prorated share for the lease term.

                     ALTERATIONS, ADDITIONS AND IMPROVEMENTS

         5.02 Tenant shall not create any openings in any roof or exterior
walls, nor make any alterations, additions, or improvements to the leased
premises without the prior written consent of Owner. Consent for nonstructural
alterations, additions or improvements shall not be unreasonably withheld by
Owner. Tenant shall have the right at all times to erect or install trade
fixtures, provided that Tenant complies with all applicable governmental laws,
ordinances and regulations. All alterations, additions, or improvements made by
Tenant shall become the property of Owner at the termination of this Lease;
however, the Tenant shall promptly remove, if Owner so elects, all alterations,
additions, and improvements, and any other property placed in the premises by
Tenant, and Tenant shall repair any damage caused by such removal.

                                      SIGNS

         5.03 Tenant has the right to erect signs on any portion of the leased
premises, including, but not limited to, the exterior walls of any building,
subject to applicable laws


                                        5




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<PAGE>



and deed restrictions. Tenant shall remove all signs at the termination of this
Lease, and shall repair any damage and close any holes caused by such removal.

                                 UTILITY CHARGES

         5.04 Tenant shall pay all utility charges for water, garbage
collection, sewer charges, electricity, heat, gas, and power used in and about
the leased premises, including any connection therefor, all such charges to be
paid by Tenant to the utility company or municipality furnishing the same,
before the same shall become delinquent.

                                    INSURANCE

         5.05 (a) Owner shall, at Tenant's expense, during the term of this
Lease, keep all buildings and structures on said premises insured against loss
or damage by fire, with extended coverage, if obtainable, to include direct loss
by flood, windstorm, hail, explosion, riot, or riot attending a strike, civil
commotion, aircraft, vehicles, and smoke in the aggregate amounts of not less
than the full fair insurable value thereof. Such policy or policies of insurance
shall name Owner as a named insured and shall provide that any loss shall be
payable solely to Owner (and to Owner's mortgagee, if any, as their respective
interests may appear), which sum Owner (and Owner's mortgagee, as applicable)
shall use for repair and restoration purposes, subject to the limitations
hereinafter contained. Tenant shall pay to Owner the premiums coming due on such
policy or policies as billed by Owner. Owner shall have no liability to Tenant
for Owner's failure to obtain such insurance in any event, the insurance
requirement being included for the protection of Owner's investment only.

         (b) Tenant, at its own expense, also shall provide and maintain in
force during the term of this Lease, Bodily Injury Liability and Property Damage
Liability insurance


                                        6




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<PAGE>



(Owner's, Landlord's and Tenant's coverage) in the amount of not less than One
Million Dollars ($1,000,000.00) covering Owner as well as Tenant with one or
more responsible insurance companies duly authorized to transact business in
Louisiana. Tenant shall furnish Owner with certificates of all insurance
required by this section. If Tenant does not maintain such insurance in full
force and effect, Owner may notify Tenant of such failure and if Tenant does not
deliver to Owner within ten (10) days after such notice certification showing
all such insurance to be in full force and effect, Owner may, at its option,
take out the necessary insurance to comply with the provisions hereof and pay
the premiums on the items specified in such notice, and Tenant covenants
thereupon on demand to reimburse and pay Owner any amount so paid or expended in
the payment of the insurance premiums required hereby and specified in the
notice, with interest at the rate of ten percent (10%) per annum from the date
of such payment by Owner until repaid by Tenant.

                            FIRE AND CASUALTY DAMAGE

         5.06 If any building or other improvements on the leased premises
should be damaged or destroyed by fire, tornado, or other casualty, Tenant shall
give immediate written notice thereof to Owner.

                                TOTAL DESTRUCTION

         (a) If any building on the leased premises should be totally destroyed
by fire, tornado, or other casualty, or it should be so damaged that rebuilding
or repairs cannot reasonably be completed within one hundred eighty (180)
working days from the date of written notification by Tenant to Owner of the
occurrence of the damage, this Lease shall terminate and rent shall be abated
for the unexpired portion of this Lease, effective as of the


                                        7




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<PAGE>



date of said written notification. The provisions of Article 12.10 hereof shall
operate to extent said one hundred eighty (180) day period if rebuilding or
repairs are delayed by force majeure.

                                 PARTIAL DAMAGE

         (b) If any building or other improvements on the leased premises should
be damaged by fire, tornado, or other casualty, but not to such an extent that
rebuilding or repairs cannot reasonably be completed within one hundred eighty
(180) working days from the date of written notification by Tenant to Owner of
the occurrence of the damage, this Lease shall not terminate but Owner shall, if
the casualty has occurred prior to the final two (2) years of the lease term, at
his sole cost and risk proceed forthwith to rebuild or repair such building and
other improvements to substantiate the condition in which they existed prior to
such damage. If the casualty occurs during the final two (2) years of the lease
term, Owner shall not be required to rebuild or repair such damage. If the
building and other improvements are to be rebuilt or repaired and are
untenantable in whole or in part following such damage, the rent payable
hereunder during the period in which they are untenantable shall be adjusted
equitably. In the event that Owner should fail to complete such rebuilding or
repairs within one hundred eighty (180) working days from the date of written
notification by Tenant to Owner of the occurrence of the damage, Tenant may at
its option terminate this Lease by written notification at such time to Owner,
whereon all rights and obligations hereunder shall cease. The provisions of
Article 11.10 hereof shall operate to extend said one hundred eighty (180) day
period if rebuilding or repairs are delayed by


                                        8




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<PAGE>



force majeure or Tenant may make such repairs at the cost and expense of Owner
and deduct same from future rental payments until Tenant has been fully
reimbursed.

                                  CONDEMNATION

         5.07 If during the term of this Lease or any extension or renewal
thereof, all of the leased premises should be taken by right of eminent domain,
this Lease shall terminate and the rent shall be abated during the unexpired
portion of this Lease, effective as of the date of the taking of said premises
by the condemning authority.

         If less than all of the leased premises shall be taken by right of
eminent domain, Owner or Tenant shall have the option to terminate this Lease on
the date of taking by written notice to Tenant or Owner within sixty (60) days
after the filing of the action in eminent domain, in which event Owner and
Tenant shall be entitled to have the proceeds divided according to law.

                                 QUIET ENJOYMENT

         5.08 Conditioned on Tenant's performance of each and every condition,
obligation and duty of Tenant, the prompt payment of all sums to be paid by
Tenant, and so long as Tenant is not in default under any provision hereof,
Owner warrants that Tenant shall peaceably and quietly enjoy the leased property
without disturbance from Owner.

                              ARTICLE 6. INDEMNITY

         Tenant agrees to indemnify and hold Owner harmless against any and all
claims, demands, damages, costs and expenses, including reasonable attorney's
fees for the defense thereof, arising from the conduct or management of Tenant's
business in the leased premises or from any breach on the part of Tenant of any
conditions of this Lease, or from any act


                                        9




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<PAGE>



or negligence of Tenant, its agents, contractors, employees, subtenants,
concessionaires, or licensees in or about the leased premises. In case of any
action or proceeding brought against Owner by reason of any such claim, Tenant,
upon notice from Owner, covenants to defend such action or proceeding by counsel
acceptable to Owner.

         In addition to the foregoing, and not by way of limitation thereof,
Tenant agrees to indemnify and hold Owner harmless from any and all liability,
damages or costs of any kind or character for injury to persons or property in
the leased premises or about or around the leased premises. Tenant also agrees
to indemnify and hold Owner harmless from all liability, damages and costs of
any and every kind and character, that may arise from the Tenant's improper care
of the leased premises, or arising out of Tenant's use and occupancy of the
leased premises, it being specifically agreed that Owner shall not be liable for
any damage or injury to Tenant or any other person or persons, or to his or
their property, goods or chattels caused by water, rain or snow, gas, steam or
electricity, flooding, or by reason of breakage, leakage or obstruction of any
pipes or leakage of any character, including roof leakage.

         It is expressly agreed that in the event Tenant violates any
regulation, ordinance or law that results in Owner being cited by the city or
any other regulatory or enforcing authority, Tenant agrees to hold Owner
harmless in all respects.

                               ARTICLE 7. DEFAULT

                                DEFAULT BY TENANT

         7.01 (a) If Tenant shall allow the rent to be in arrears more than five
(5) days after written notice of such delinquency or shall remain in default
under any other provision


                                       10




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<PAGE>



or condition of this Lease for a period of fifteen (15) days after written
notice from Owner, or should any other person that Tenant secures possession of
the premises, or any part thereof, by reason of any receivership, bankruptcy
proceedings, or other operation of law in any manner whatsoever, Owner may at
its option, without notice to Tenant, terminate this Lease, or in the
alternative, Owner may reenter and take possession of said premises and remove
all persons and property therefrom, without being deemed guilty of any manner of
trespass, and relet the premises of any part thereof, for all or any part of the
remainder of said term, to a party satisfactory to Owner, and at such monthly
rental as Owner may with reasonable diligence be able to secure. Should Owner be
unable to relet after reasonable efforts to do so, or should such monthly rental
be less than the rental Tenant was obligated to pay under this Lease, or any
renewal thereof, plus the expense or reletting, then Tenant shall pay the amount
of such deficiency to Owner.

         (b) It is expressly agreed that in the event of default by Tenant
hereunder, Owner shall have a lien upon all premises and upon all personal
property located on said leased premises, as security for rent due and to become
due for the remainder of the current lease term, which lien shall not be in lieu
of or in any way affect the statutory landlord's lien given by law, but shall be
cumulative thereto; and Tenant hereby grants to Owner a security interest in all
such personal property placed in said leased premises for such purposes subject
to any purchase money security lien given on equipment, furniture, fixtures or
other items by Tenant. This shall not prevent the sale, exchange or replacement
by Tenant of any personal property in the ordinary course of business free of
such lien to Owner. In the event Owner exercises the option to terminate the
lease hold, reenter, and


                                       11




<PAGE>


<PAGE>



relet the premises as provided in the preceding paragraph, then Owner after
giving reasonable notice to Tenant of the intent to take possession and giving
an opportunity for a hearing thereon, may take possession of all of Tenant's
property on the premises and sell same at public or private sale after giving
Tenant reasonable notice of the time and place of any public or private sale
after giving Tenant reasonable notice of the time and place of any public sale
or of the time after which any private sale is to be made, for cash or on
credit, or for such prices and terms as Owner deems best, with or without having
the property present at such. The proceeds of such sale shall be applied first
to the necessary and proper expense of removing, storing, and selling such
property, then to the payment of any rent or other sum due or to become due
under this Lease, with the balance, if any, to be paid to Tenant.

         (c) All rights and remedies of Owner under this Lease shall be
cumulative, and none shall exclude any other right or remedy at law. Such rights
and remedies may be exercised and enforced concurrently and whenever and as
often as occasion therefor arises.

         (d) If any rental shall not be paid within ten (10) days from its due
date, in addition to all other remedies of Owner, Tenant shall pay to Owner, on
demand by Owner, as additional rental, a sum equal to ten percent (10%) of such
late rental payment or Twenty-five and 00/1000 ($25.00) Dollars, whichever is
greater, to offset the expense of Owner in accounting for such late payment.


                                       12




<PAGE>


<PAGE>



                                DEFAULT BY OWNER

         7.02 If Owner defaults in the performance of any term, covenant, or
condition required to be performed by him under this Lease, Tenant may elect
either one of the following:

              (a) After not less than thirty (30) days written notice to Owner,
Tenant may remedy such default by any necessary action, and in connection with
such remedy may pay expenses and employ counsel; all sums expended or
obligations incurred by Tenant in connection therewith shall be paid by Owner to
Tenant on demand, and on failure of such reimbursement, Tenant may, in addition
to any other right or remedy that Tenant may have, deduct the cost and expenses
thereof from rent subsequently becoming due hereunder; or

              (b) Elect to terminate this Lease on giving at least forty-five
(45) days' notice to Owner of such intention, thereby terminating this Lease on
the date designated in such notice, unless Owner shall have cured such default
prior to expiration of the forty-five (45) day period.

                         ARTICLE 8. INSPECTION BY OWNER

         Tenant shall permit Owner and his agents to enter into and upon the
leased premises at all reasonable times for the purpose of inspecting the same
or for the purpose of maintaining or making repairs or alterations to any
building.

                       ARTICLE 9. ASSIGNMENT AND SUBLEASE

                       ASSIGNMENT AND SUBLETTING BY TENANT

         9.01 Neither Tenant nor Tenant's legal representative or successor in
interest by operation or law or otherwise shall assign this Lease, or any
interest therein, or sublet the


                                       13




<PAGE>


<PAGE>



leased premises, or any part thereof, or right or privilege pertinent thereto,
without the prior written consent of Owner. Any assignee approved by Owner must
assume in writing all of Tenant's obligations under this Lease, and Tenant shall
remain liable for each and every obligation under this Lease. The Owner will be
paid by Tenant a minimum charge of $100.00 for each permitted assignment or
subletting.

                               ASSIGNMENT BY OWNER

         9.02 Owner is expressly given the right to assign any or all of its
interest under the terms of this Lease.

                           ARTICLE 10. TENANT HOLDOVER

         In the event Tenant remains in possession of the leased premises after
the expiration of the term of this Lease Agreement or any agreed extension
thereof, such holding over on the part of the Tenant will not renew or extend
this Lease Agreement, and Tenant shall be deemed to be occupying and using the
leased premises as a tenant at the sufferance of Owner, subject to all of the
terms, conditions and provisions contained in this Lease Agreement insofar as
the same are applicable to a tenancy at sufferance; provided, however, in such
event Tenant covenants and agrees to pay to Owner monthly as rent for the leased
premises for such holding over, a sum equal to one hundred fifty percent (150%)
of the total rental due or paid by Tenant for the last month of the term of this
Lease Agreement and all other sums required to be paid by Tenant under this
Lease Agreement.


                                       14




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<PAGE>



                            ARTICLE 11. MISCELLANEOUS

                              NOTICES AND ADDRESSES

         11.01 All notices provided to be given under this Lease shall be given
by certified mail or registered mail, addressed to the property party, at the
following address:

         OWNER:                                   TENANT:
         O.W. BURTON, JR., INDIVIDUALLY           PROTEIN SECURITIES COMPANY
         AND AS TRUSTEE OF THE TRUST OF           1717 ST. JAMES PLACE
         ANNA BURTON                              SUITE 550
         P.O. BOX 1230                            HOUSTON, TEXAS 77056
         BRIDGE CITY, TEXAS 77611

                                  PARTIES BOUND

         11.02 This Lease shall be binding upon the inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, legal
representatives, successors, and assigns where permitted by this Lease.

                               TEXAS LAW TO APPLY

         11.03 To the maximum extent allowable under law, this Lease shall be
construed under and in accordance with the laws of the State of Texas, and all
obligations of the parties created hereunder are performable in Orange County,
Texas.

                               LEGAL CONSTRUCTION

         11.04 In case any one or more of the provisions contained in this Lease
shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provisions thereof and this Lease shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.


                                       15




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<PAGE>



                           PRIOR AGREEMENTS SUPERSEDED

         11.05 This Lease constitutes the sole and only agreement of the parties
hereto and supersedes any prior understandings or written or oral agreements
between the parties respecting the within subject matter.

                                    AMENDMENT

         11.06 No amendment, modification, or alteration of the terms hereof
shall be binding unless the same be in writing, dated subsequent to the date
hereof and duly executed by the parties hereto.

                         RIGHTS AND REMEDIES CUMULATIVE

         11.07 The rights and remedies provided by this Lease Agreement are
cumulative and the use of any one right or remedy by either party shall not
preclude or waive its right to use any or all other remedies. Said rights and
remedies are given in addition to any other rights the parties may have by law,
statute, ordinance, or otherwise.

                                WAIVER OF DEFAULT

         11.08 No waiver by the parties hereto of any default or breach of any
term, condition, or covenant of this Lease shall be deemed to be waiver of any
other breach of the same or any other term, condition, or covenant contained
herein.

                                 ATTORNEYS' FEES

         11.09 In the event Owner or Tenant breaches any of the terms of this
Lease whereby the party not in default employs attorneys to protect or enforce
its rights hereunder and prevails, then the defaulting party agrees to pay to
the other party reasonable attorneys' fees so incurred by such other party.


                                       16




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<PAGE>



                                  FORCE MAJEURE

         11.10 Neither Owner nor Tenant shall be required to perform any term,
condition, or covenant in this Lease so long as such performance is delayed or
prevented by force majeure, which shall mean acts of God, strikes, lockouts,
material or labor restrictions by any governmental authority, shortage or
unavailability of labor or materials, civil riot, floods, and any other cause
not reasonably within the control of Owner or Tenant and which by the exercise
of due diligence Owner or Tenant is unable, wholly or in part, to prevent or
overcome.

                                 TIME OF ESSENCE

         11.11 Time is of the essence of this Lease.

                              CONDITION OF PREMISES

         11.12 The leased premises and improvements have been examined by
Tenant, or accepted by Tenant in "as is" condition, and are accepted by Tenant
as being fit for the purposes for which such premises are leased.

                 SUBORDINATION TO EXISTING AND FUTURE MORTGAGES

         11.13. This Lease shall be subject and subordinate at all times to the
lien of existing mortgages and of mortgages which hereafter may be made a lien
on the leased property. Although no instrument or act on the part of the Tenant
shall be necessary to effectuate such subordination, the Tenant will,
nevertheless, execute and deliver such further instruments subordinating this
Lease to the lien of any such mortgages as may be desired by the mortgagee. The
Tenant hereby appoints the Owner its attorney-in-fact, irrevocably, to execute
the deliver any such instrument for the Tenant.


                                       17




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                            PLACE FOR PAYMENT OF RENT

         11.14 All rent payable hereunder to Owner shall be payable at Owner's
address for notices or at such other address as Owner may from time to time
designate.

                                 PURCHASE OPTION

         11.15 Owner grants to Tenant, for the duration of the term of this
Lease, an exclusive option to purchase the leased premises, including all
improvements located thereon, on the following terms and conditions:

               (a) Tenant may exercise this option only by giving written notice
to Owner of Tenant's intent to exercise such option.

               (b) Owner and Tenant have heretofore entered into one certain
Lease Agreement dated November ___, 1997 for 45 acres of land adjacent to the
leased premises (the "Adjacent Land"). This option to purchase may only be
exercised if Tenant exercises its option to purchase, and in fact closes the
purchase of, the Adjacent Land.

               (c) The full purchase price for the leased premises shall be the
sum of one dollar ($1.00). 


               (d) Owner shall furnish to Tenant, within fifteen (15) days after
receiving notice of Tenant's intention to exercise its option, a survey and a
commitment for title insurance issued by a title company of Tenant's selection.
Within fifteen (15) days after the delivery of such commitment to Tenant, Tenant
shall furnish Owner with a written list of Tenant's objections, if any, to the
title to the leased premises. Owner shall then have twenty (20) days after
receipt of such written list of objections to meet any requirements made by
Tenant, and Owner agrees to use its best efforts to meet any such requirements.


                                       18




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<PAGE>



If Owner is unable to meet the requirements made by Tenant within such twenty
(20) day period (or any extension thereof as hereinafter provided), Tenant's
offer to purchase the leased premises shall automatically terminate unless
Tenant agrees in writing to grant an extension of time to Owner to meet such
requirements or agrees to purchase the leased premises notwithstanding Tenant's
objections. Upon the termination of Tenant's offer to purchase the leased
premises, as provided herein, Tenant shall retain the right to exercise its
purchase option herein in the future and this Lease shall remain in effect.

               (e) In the event Tenant fails to close the sale (through no fault
on the part of Owner) within forty-five (45) days after exercising such option
then Tenant's offer to purchase shall be deemed terminated, and this Lease
Agreement shall continue in effect as though Tenant had not exercised such
purchase option.

               (f) On closing of the sale, Owner shall convey to Tenant by
general warranty deed good and marketable title to the leased premises, as
evidenced by a title insurance policy in the amount desired by Tenant issued by
a title company of Tenant's selection, subject only to the following exceptions:

                   1. Any and all restrictions, covenants, conditions,
easements, rights of way, oil, gas and other mineral reservations and other
reservations, if any, relating to the leased premises, but only to the extent
that they are still in effect, shown of record in the hereinabove mentioned
county and state and shown on the title insurance policy as exceptions to
insurance coverage or as matters to which such coverage is subject, and all
zoning laws, regulations and ordinances of municipal and/or other governmental
authorities, if any, but only to the extent they are still in effect relating to
the leased premises.


                                       19




<PAGE>


<PAGE>



                   2. Any discrepancies, conflicts, or shortages in area or
boundary lines, or any encroachments, or any overlapping of improvements.

                   3. All taxes for the current year and subsequent years, and
subsequent assessments for prior years due to change in land usage or ownership,
not yet due and payable.

                   4. Any liens which may be created hereunder.

                   5. Rights of parties in possession.

               (g) All realtor or broker commissions, filing fees, cost of
owner's title insurance policy, and costs of environmental studies and
remediation, if any, shall be paid by Tenant; provided, however, that Owner and
Tenant shall each bear their own respective attorney's fees.

               (h) By exercising its option and by purchasing the leased
premises, Tenant agrees to indemnify, hold harmless and defend Owner against any
and all demands or claims based upon any allegations of environmental harm or
damage to the leased premises, including any assessments, fines, penalties, or
claims for costs of remediation, regardless of the party or governmental entity
making such claims, and regardless of when such alleged contamination or other
violations may have occurred. This obligation shall survive the closing of such
purchase.

         IN WITNESS WHEREOF, the undersigned Owner and Tenant hereto execute
this Lease as of the day and year first above written.


                                       20




<PAGE>


<PAGE>



                                    AGREEMENT

THE STATE OF LOUISIANA      )

PARISH OF ST. MARY          )

         KNOW ALL BY THESE PRESENTS: that O.W. BURTON, JR., INDIVIDUALLY AND AS
TRUSTEE OF THE TRUST OF ANNA BURTON, (hereinafter "Grantor"), owners of certain
real property, desire to furnish an option, as set forth in Louisiana Civil Code
Article 2620, to lease such property to Protein Securities Company (hereinafter
"Grantee"). The Grantor and Grantee's consent to this agreement is evidenced by
their signatures; performed under authentic act. The Lease Agreement to be
executed is attached hereto and is incorporated herein for all purposes; the
property is described in Exhibit "A" to such Lease Agreement.

         This option is exercisable by execution of the attached Lease
Agreement.

         FURTHER, Pursuant to LA. C.C. article 2620, Grantor desires, offers and
agrees to furnish unto Grantee an option to purchase the property. Grantor
represents that he has both the power and authority to execute this document and
agrees to indemnify Grantee against any loss, including attorney's fees and
costs, to which Grantee may be exposed in the event the Grantee's right to
exercise this option is challenged. Said option is to be exercised by November
25, 2002. Said option to purchase can be exercised only if the option to
purchase the property contained in the attached Lease Agreement is properly
exercised. The purchase price of the immovable property set forth in Exhibit "A"
to the Lease Agreement is One Dollar ($1.00) U.S. currency. This agreement
performed under authentic act.

GRANTOR:                                       GRANTEE:

___________________________                    ___________________________
By: O.W. BURTON                                By: Eric T. Furey for Lessor
                                               Protein Security Company

WITNESSES:

___________________________

___________________________

___________________________

SWORN TO SUBSCRIBED BEFORE ME BY ALL PARTICIPANTS AND WITNESSES, 
ON THIS 25TH DAY OF NOVEMBER, 1997.

___________________________
NOTARY PUBLIC


                                       21




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<PAGE>



                                                                       EXHIBIT A

          That certain tract or parcel of land measuring 6.2 acres,
          more or less, situated in Section 44, T16S, R13E, St. Mary
          Parish, Louisiana, being further described as Tract
          "A-B-C-D-A" on a plan of land by Glenn E. Miller, Land
          Surveyor, showing property of Intercoastal Shipyard, a copy
          of which plan is attached hereto for greater particularity
          and made a part hereof, which property fronts on Bayou Boeuf
          by 378 feet more or less.


                                       22




<PAGE>


<PAGE>



                       STATUTORY DURABLE POWER OF ATTORNEY

NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING. THEY ARE
EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT, CHAPTER XII, TEXAS PROBATE CODE.
IF YOU HAVE ANY QUESTIONS ABOUT THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE.
THIS DOCUMENT DOES NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE
DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU LATER WISH 
TO DO SO.

         I. O.W. BURTON, JR., reside at E. Roundbunch Road, Bridge City, Texas,
and I hereby appoint my daughter, RACHEL BURTON WHEELER, as my agent
(attorney-in-fact) to act for me in any lawful way with respect to all of the
following powers except for a power that I have crossed out below.

          TO WITHHOLD A POWER, YOU MUST CROSS OUT EACH POWER WITHHELD.

                  Real property transactions;
                  Tangible personal property transactions; 
                  Stock and bond transactions; 
                  Commodity and option transactions;
                  Banking and other financial institution transactions; 
                  Business operating transactions;
                  Insurance and annuity transactions; 
                  Estate, trust, and other beneficiary transactions;
                  Claims and litigation;
                  Personal and family maintenance;
                  Benefits from Social Security, Medicare, Medicaid, or other
                     governmental programs or civil or military services;
                  Retirement plan transactions; and
                  Tax Matters.


         IF NO POWER LISTED ABOVE IS CROSSED OUT, THIS DOCUMENT SHALL BE
CONSTRUED AN INTERPRETED AS A GENERAL POWER OF ATTORNEY AND MY AGENT (ATTORNEY
IN FACT) SHALL HAVE THE POWER AND AUTHORITY TO PERFORM OR UNDERTAKE ANY ACTION I
COULD PERFORM OR UNDERTAKE IF I WERE PERSONALLY PRESENT.

ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS LIMITING OR EXTENDING
THE POWERS GRANTED TO YOUR AGENT.

IN ADDITION TO THE POWERS SET FORTH ABOVE, MY DAUGHTER, RACHEL BURTON WHEELER
HAS THE POWER TO SIGN ANY AND ALL DOCUMENTATION IN THE SALE OF ASSETS AND/OR
LEASE OF THE PROPERTY IN THE ESTATE OF ANNIE BURTON AND FOR MY UNDIVIDED
INTEREST THEREIN TO GULF PROTEIN SECURITIES.


                                       23




<PAGE>


<PAGE>



UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS EFFECTIVE
IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.

         CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE
ALTERNATIVE NOT CHOSEN:

         (A) This Power of Attorney is not affected by my subsequent disability
or incapacity.

         (B) This Power of Attorney becomes effective upon my disability or
incapacity.

         YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY IS TO
BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.

         IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED THAT YOU
CHOSE ALTERNATIVE (A).

         If Alternative (B) is chosen and a definition of my disability or
incapacity is not contained in this Power of Attorney, I shall be considered
disabled or incapacitated for purposes of this Power of Attorney if a physician
certifies in writing at a date later than the date this Power of Attorney is
executed that, based on the physician's medical examination of me, I am mentally
incapable of managing my financial affairs. I authorize the physician who
examines me for this purpose to disclose my physical or mental condition to
another person for purposes of this Power of Attorney. A third party who accepts
this Power of Attorney is fully protected from any action taken under this Power
of Attorney that is based on the determination made by a physician of my
disability or incapacity.

         I agree that any third party who receives a copy of this document may
act under it. Revocation of the Durable Power of Attorney is not effective as to
a third party until the third party receives actual notice of the revocation. I
agree to indemnify the third party for any claims that arise against the third
party because of reliance on this Power of Attorney.

         If any agent named by me dies, becomes legally disabled, resigns, or
refuses to act, I name the following (each to act alone and successively, in the
order named) as successor(s) to that agent:
_________________________________________________________________.

         Signed this 24th day of November, 1997.

                                    _____________________________________
                                    O.W. BURTON, JR.


                                       24




<PAGE>


<PAGE>


THE STATE OF TEXAS     )

COUNTY OF ORANGE       )

         This document was acknowledged before me on the 24th day of November,
1997, by O.W. BURTON, JR.

                                     ___________________________________
                                     NOTARY PUBLIC, STATE OF TEXAS

         THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER THE
APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT.


                                       25





<PAGE>





<PAGE>


                                                           Abbeville Plant Lease
                                                           Property 16.453 acres

     This Agreement of Lease, effective November 16, 1964, by and between ANDRE
CESSAC, husband of, and LILLIE MAE RICHARD, presently residing together in
Vermilion Parish, Louisiana (hereinafter called Lessors) and SEACOAST PRODUCTS,
INC., a Delaware corporation, domiciled in Lewes, Delaware (hereinafter called
Lessee), herein represented by Otis H. Smith, its President.

                                   WITNESSETH:

     1. Lessors, as owners of the usufruct of the property described as (a)
hereinafter, by virtue of that certain deed dated December 14, 1964, recorded in
COB 550 folio 80 of the records of Vermilion Parish, hereby lease to Lessee, for
a primary term of twenty years from date hereof, the following property situated
in Vermilion Parish, Louisiana (hereinafter sometimes called the Property):

          a.   A tract of land containing 16.453 acres, situated in the Seventh
               Ward of Vermilion Parish, Louisiana, in Section 86, Township 14
               South, Range 3 East and described as beginning at a point where
               the North line of the property of the Lessor meets the West edge
               of Vermilion River; thence running North 70[d]30' West, a
               distance of 996.2 feet, thence running South 19[d]30' West,
               a distance of 821.6 feet, thence running South 70[d]27' East
               a distance of 750 feet to the Vermilion River, thence running in
               a general Northerly direction along the meander line of said
               Vermilion River to the point of beginning, said property being
               more fully shown on the plat of D. P. O'Brien, registered
               surveyor, said plat marked Exhibit "A" for identification and
               attached hereto; said 16.453 acres being shown on the said plat
               as "Proposed Plant Site"; and

          b.   A non-exclusive Right-of-Way 60 feet in width, and described as
               beginning at the Northwest corner of tract #1 above described,
               thence running in a generally Southern direction along the West
               line of said tract #1 above described a distance of 62.6 feet,
               thence





<PAGE>


<PAGE>



               running North 70[d]30' West, a distance of 3,475.8 feet to
               Louisiana State Highway No. 333, thence running in a generally
               Northern direction along the said State Highway a distance of
               87.1 feet, thence running South 70[d]30' East, a distance
               of 3,557.0 feet to the point of beginning. Said Right-of-Way
               being more fully shown on said Exhibit "A" as "Proposed Road".

     2. This lease shall cover only the surface of the Property, and does not
include or otherwise affect the minerals underlying the land. Furthermore, the
land covered by this lease is now subject to an oil, gas and mineral lease in
favor of W. S. Kilroy, recorded in the Conveyance Records of Vermilion Parish,
in Volume 516, page 591, under Entry No. 168015. Lessee hereunder takes the
Property covered by this lease subject to the above mentioned mineral lease, but
is granted the right to negotiate with the owner or owners of said mineral lease
for a subordination of the rights of the latter to the rights of Lessee
hereunder. It is further provided that any oil, gas or mineral operations which
may be conducted on the Property by Lessors, or their successors or assigns
(including any lessees under any mineral lease which may hereafter be granted on
said Property), after expiration of the existing mineral lease, shall not
interfere with but shall be subject to, the rights herein granted.

     3. Lessee shall pay to Lessors, as rental:

          a.   During the first two years of the term hereof, commencing as of
               November 15, 1964, the sum of two hundred fifty ($250) dollars
               per month; and

          b.   During the remaining years of the term hereof, the sum of five
               hundred ($500) dollars per month.


                                        2




<PAGE>


<PAGE>



Said rental shall be payable in advance on the first day of each month during
the term of this lease, and shall be delivered by mail addressed to Lessors at
Route 3, Box 139, Abbeville, Louisiana.

     4. It is understood that Lessee intends to use the Property for a menhaden
processing plant and/or for any other uses permitted by law. However, Lessee
agrees that any menhaden plant constructed on the Property will employ such
techniques and equipment as will eliminate odors from the plant as far as is
practicable to do so. Lessee agrees to use only refrigerated vessels to bring
fish into the plant except in the case of an emergency beyond Lessee's control.
In addition, Lessee agrees that in its normal operations it will not discharge
into the Vermilion River any substances other than fresh water used in the
plant's condensing, washing or cooling systems, or the fresh water associated
with the processing of fish flour. The water to be discharged into the Vermilion
River shall not be treated chemically except for the purposes of water softening
and water purification.

     5. Lessee is hereby granted the option to lease the Property for an
additional term of twenty years, on the same terms and conditions as specified
herein (the monthly rental to be $500); and three additional, successive
options, also of twenty years each, also on the same terms and conditions as
specified herein. Lessee shall exercise said options by giving written notice to
Lessors of its intention so to do, within one year prior to the date that this
lease would otherwise terminate, but no later than 90 days prior to such
termination.

                                        3




<PAGE>


<PAGE>



     6. Lessee shall have the right to drill one or more water wells on the
Property, at its expense, for the purpose of its operations on the Property.

     7. Lessee shall have the right to construct any buildings and other
improvements on the Property, subject to all applicable laws regulating such
buildings and improvements, including zoning ordinances and other local
regulations. Lessee shall have the right, upon the termination of the lease, to
remove any and all structures which it may have placed on the premises, within a
period not exceeding six months from the termination of this lease, at its
expense but without additional charge by Lessors, regardless of the cause of
such termination; provided, however, (a) that Lessee shall be obligated to pay
the amount of rent herein stipulated, for such period as its buildings or other
property are permitted to remain on the Property after expiration of the lease;
and (b) that, if for any reason this lease should be terminated by Lessors for
non-payment of rent, Lessee shall have no right to remove the buildings and
other permanent improvements constructed thereon (but shall not be liable for
any rental therefor as under clause (a) above), but Lessee may remove, within a
period of 60 days from such termination, all machinery and other personal
property not permanently attached to the buildings or other improvements.

     8. Lessee is granted the right to use the existing road leading from the
"Proposed Plant Site", running along the south side of Lessors' property to
State Highway No. 333, until June 1, 1965, and so long thereafter until notified
by Lessors to discontinue use of said existing road; or until the proposed 60
foot road along the northern boundary of Lessors' property is ready for use.


                                        4




<PAGE>


<PAGE>



     9. Lessee shall erect, and maintain in good condition while this lease is
in force, a suitable livestock fence along the south boundary of the proposed 60
foot roadway along the northern boundary of Lessors' property, and along the
western and southern boundary lines of the "Proposed Plant Site" leased herein
(described in Paragraph 1 hereof). Lessee shall not be required to erect or
maintain any gates along said fence, but shall be obligated to maintain said
fence, as well as the existing livestock fence which runs along the northern
boundary of Lessors' property from State Highway No. 333 to the River; however,
Lessors shall have the right to place gates or cattle guards, at their expense,
along the south boundary of the proposed 60 foot roadway.

     10. Lessee shall pay all ad valorem taxes on the Property herein leased
during the time that this lease is in force.

     11. If, at any time within a period of three years from the date of this
lease, (a) this lease should be terminated either by consent of the parties or
for any reason not within the control of either party, or (b) the use of the
Property is severely restricted as a result of matters not within the control of
either party, then Lessee shall have a reasonable time within which to remove
any buildings and other improvements which may have been constructed on the
Property (but shall be under no obligation to remove concrete foundations or
underground facilities), and shall, at Lessors' request, reconvey to Lessors
such title and interest in and to the Property which Lessee may have acquired
from Lessors, without warranty on the part of Lessee except for Lessee's own
acts.


                                        5




<PAGE>


<PAGE>



     12. In the event Lessee should fail to pay any two successive installments
of rent when due, Lessors shall have the option to declare the full amount of
rental payable for the unexpired term of this lease due and payable as of the
expiration date of such default. Should it be necessary that Lessors retain an
attorney to enforce their rights under this paragraph, Lessee shall pay, in the
event that Lessors' position is legally sustained, 20% additional of any amount
due as attorney's fees, said fees in no event to be less than one hundred ($100)
dollars.

     13. All notices hereunder shall be effective if in writing and mailed,
postage prepaid, to Lessors at Route 3, Box 139, Abbeville, Louisiana, and to
Lessee at both P.O. Box 323, Abbeville, Louisiana, and Seacoast Products, Inc.,
Lewes, Delaware.

     14. Should Lessors contend that Lessee is violating any of the provisions
of this lease, they shall cause written notice of such alleged violation to be
mailed to Lessee at the addresses set forth in Paragraph 13 herein, and Lessee
shall have twenty days from the posting of such notice in the U.S. mails within
which to correct the condition described in the notice, and Lessee's failure to
so correct shall be grounds for Lessors to seek judicial cancellation of this
lease, at Lessor's option.

     15. The term "Lessors" as used herein shall be taken to mean, in the event
of the death of either of them, the survivor.


                                        6




<PAGE>


<PAGE>



     IN WITNESS WHEREOF, this agreement is executed effective as of the date
written above, at Abbeville, Louisiana.

WITNESSES:


- ----------------------------                  -------------------------------
Helen L. Milliman                             Andre Cessac


- ----------------------------
Ann B. Guilbeaux


- ----------------------------                  -------------------------------
Helen L. Milliman                             Lillie Mae Richard Cessac


- ----------------------------
Ann B. Guilbeaux


                                       7




<PAGE>


<PAGE>



                         ASSIGNMENT OF COMMERCIAL LEASES

STATE OF TEXAS

COUNTY OF HARRIS

     BE IT KNOWN, that on this 27th day of April, 1984,

     BEFORE ME, Judy C. Williams, a Notary Public, duly commissioned and
qualified, in and for the State of Texas, therein residing, and in the presence
of the witnesses hereinafter named and undersigned,


     PERSONALLY CAME AND APPEARED:


                             SEACOAST PRODUCTS, INC.

     a corporation having its principal place of business at Port Monmouth, New
     Jersey, organized under the laws of the State of Delaware, the successor
     corporation of The Fish Meal Company, a Mississippi corporation, and Gulf
     Menhaden Company, Inc., a Louisiana corporation, herein appearing by and
     through Frederic G. Eustis, its duly authorized President, authorized by
     resolution of the board of directors of said corporation, a certified copy
     whereof is annexed hereto (hereinafter sometimes referred to as
     "Assignor"),

who declares that Seacoast Products, Inc. does by these presents grant, bargain,
convey, transfer, assign, set over, abandon and deliver, with all legal
warranties and with full substitution and subrogation in and to all the rights
and actions of warranty which it has or may have against all preceding owners
and vendors, unto


                                        8




<PAGE>


<PAGE>



                            MENHADEN FISHERIES, INC.

     a corporation having its principal place of business at Abbeville,
     Louisiana, organized under the laws of the State of Delaware, herein
     appearing by and through Marvin J. Migura its duly authorized Vice
     President, authorized by resolution of the board of directors of said
     corporation, a certified copy whereof is annexed hereto (hereinafter
     sometimes referred to as "Assignee"),

being here present, accepting and purchasing for Menhaden Fisheries, Inc., its
successors and assigns, and acknowledging due delivery and possession thereof,
all and singular the leasehold right, title, and interest in and under the
hereinafter described commercial leases as same appear in Exhibit "A", attached
hereto and made a part hereof. Reference is hereby made to the leases described
in Exhibit "A", and the recording thereof for all purposes including a more
particular description of the lands covered thereby.

     To have and to hold said right, title, and interest unto Assignee, its
heirs and assigns forever, subject to the terms and conditions hereof and the
terms, covenants, and provisions of said commercial leases.

     This Assignment is made and accepted for and in consideration of the price
and sum of Ten and no/100 ($10.00) Dollars, and other good and valuable
considerations, which Assignee has well and truly paid, in ready and current
money to vendor, who hereby acknowledges the receipt thereof and grants full
acquittance and discharge therefor.


                                        9




<PAGE>


<PAGE>



     This Assignment is subject to that certain Purchase Agreement by and
between the parties hereto dated of even date.

     THUS DONE AND PASSED in my office at Houston, Texas, on the day, month and
year herein first above written, in the presence of the undersigned, competent
witnesses, who hereunder sign their names with said appearers, and me, Notary,
after reading of the whole.



WITNESSES:                              SEACOAST PRODUCTS, INC.

                                        By:
- -------------------------------            -------------------------------
                                            Frederic G. Eustis, President

- -------------------------------


                                        MENHADEN FISHERIES, INC.

                                        By:
                                           -------------------------------
                                              Martin J. Migura
                                              Vice President


                         -------------------------------
                          Notary Public, State of Texas

                    My Commission expires
                                         ------------------------- .


                                       10




<PAGE>


<PAGE>



                                   EXHIBIT "A"

     To Assignment of Commercial Leases dated April 27, 1984, from Seacoast
Products, Inc. as Assignor to Menhaden Fisheries, Inc., as Assignee.

     1.   Commercial Lease dated November 16, 1964, between Andre and Lillie Mae
          Richard Cessac (Lessors) and Seacoast Products, Inc. (Lessee) duly
          recorded in the Conveyance Office for the Parish of Vermilion, in Book
          550, Page 85, covering a certain tract of land containing 16.453 acres
          situated in Section 86, Township 14 South, Range 3 East including a
          60' non-exclusive right-of-way.

     2.   Commercial Lease dated November 10, 1970, between Purvis Theall and
          Ethlyn Cessac (Lessors) and Seacoast Products, Inc. (Lessee) duly
          recorded in the Conveyance Office for the Parish of Vermilion, in Book
          694, Page 392, as amended by act registered in Conveyance Book 735,
          Page 198, covering a certain tract of land containing 6.83 acres
          situated in Section 86, Township 14 South, Range 3 East.

     3.   Commercial Lease dated December 8, 1970, between Purvis Theall and
          Ethlyn Cessac (Lessors) and Seacoast Products, Inc. (Lessee) duly
          recorded in the Conveyance Office for the Parish of Vermilion, in Book
          697, Page 13, covering a certain tract of land containing 5.215 acres
          situated in Section 86, Township 14 South, Range 3 East.

     4.   Commercial Lease dated August 1, 1972, between Purvis Theall and
          Ethlyn Cessac (Lessors) and Seacoast Products, Inc. (Lessee) duly
          recorded in the Conveyance Office for the Parish of Vermilion, in Book
          734, Page 631, covering a certain tract of land containing 1.774 acres
          situated in Section 86, Township 14 South, Range 3 East.


                                       11




<PAGE>


<PAGE>



                            MENHADEN FISHERIES, INC.

                            CERTIFICATE OF SECRETARY

     I, Kent R. Stephenson, do hereby certify that I am the duly elected,
qualified and acting Vice President and Secretary of Menhaden Fisheries, Inc., a
corporation duly organized and existing under the laws of Delaware (the
"Company"), and that as such have the custody of the corporate records and seal
of the Company; that attached hereto and marked Exhibit "A" is a true and
correct copy of resolutions duly and properly adopted by unanimous written
consent of the Board of Directors of the Company on April 26, 1984, as the same
appear in the minute book of the Company, that there are no provisions of the
Charter or By-Laws of the Company which impair or modify the effectiveness of
said resolutions, and that such resolutions remain in full force and effect as
of the date hereof in the form contained in Exhibit "A" attached hereto, and
have not been amended, altered, repealed, rescinded or changed in any way
whatsoever; and that M.J. Migura is a Vice President of the Company

     IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the corporate seal of the Company this 27th day of April, 1984.


                                      -----------------------------
                                      Kent R. Stephenson, Vice
                                      President and Secretary


THE STATE OF TEXAS  )
                   :
COUNTY OF HARRIS    )

     BEFORE ME, the undersigned authority on this day personally appeared Kent
R. Stephenson, known to me to be the person and officer of the Company indicated
above, and being by me duly sworn, on oath acknowledged and stated that the
facts contained in the foregoing Certificate are true and correct, and that he
executed the same in the capacity therein stated as an act of the Company.

     SUBSCRIBED and SWORN to this 27th day of April 1984.


                                      -----------------------------
                                      Peggy Walker, Notary Public
                                      State of Texas
                                      My Commission expires February 26, 1985.


                                       12




<PAGE>


<PAGE>


                                   EXHIBIT "A"



                         Approval of Purchase of Certain
                     Menhaden Fishing and Processing Assets


WHEREAS, management of the Company has negotiated for the Company to acquire
certain menhaden fishing and processing assets and the assumption of certain
related liabilities from Seacoast Products, Inc. and certain of that company's
affiliates for consideration of $20,400,000 plus the value of certain
inventories and prepaid expenses; and

WHEREAS, the proposed acquisition has previously been approved by the Board of
Directors of Zapata Corporation, the Company's sole shareholder;

NOW, THEREFORE, it is hereby

RESOLVED, that the above-described acquisition be, and it hereby is, authorized
and approved; and further

RESOLVED, that the President or any Vice President of the Company be, and they
each hereby are, authorized and directed to negotiate and execute for and on
behalf of the Company a Purchase Agreement providing for the said acquisition,
with such terms and conditions as the officer executing the same may deem to be
in the best interests of the Company, and with the said execution to be
conclusive evidence of approval for and in the name and on behalf of the
Company; and further

RESOLVED, that the proper officers of the Company be, and they hereby are,
authorized and directed to execute and deliver all such further documents,
certificates and instruments and take all such further action as they deem
necessary or appropriate to carry out the intent and purpose of the foregoing
resolutions.


                                       13



<PAGE>




<PAGE>

- ------------------------------------

PURVIS THEALL AND
ETHLYN CESSAC

TO                                                              COMMERCIAL LEASE

SEACOAST PRODUCTS, INC.

- ------------------------------------

         BEFORE ME, MARCUS A. BROUSSARD, JR., a Notary Public, in and for
Vermilion Parish, Louisiana, personally came and appeared:

                           PURVIS THEALL and ETHLYN CESSAC, husband and wife,
                           both persons of full age and residents of Vermilion
                           Parish, Louisiana, whose address is Route 3, Box
                           133A, Abbeville, Louisiana, hereinafter referred to
                           as LESSORS,

                                                   AND

                           SEACOAST PRODUCTS, INC., a Delaware Corporation,
                           whose address is Lewes, Delaware, hereinafter
                           referred to as LESSEE, herein represented by its
                           President, OTIS H. SMITH, as per resolution of the
                           Board of Directors, a certified copy of which is
                           attached,

who declare that they do enter into the following lease:

                  1. LESSORS do hereby lease to LESSEE for a primary term of
forty-five years, beginning January 1, 1971, and ending December 31, 2016, the
following described property, to-wit:

                           6.83 acres situated in Section 86, Township 14 South,
                           Range 3 East in the Seventh Ward of Vermilion Parish,
                           Louisiana, and described as beginning at the
                           Northeast Corner of the property purchased by LESSEE
                           from Andre Cessac, by Deed recorded in Volume 550, at
                           Page 80, under Entry Number         , of the
                           Conveyance Records

<PAGE>


<PAGE>



                           of Vermilion Parish, Louisiana, thence running North
                           13 degrees 59 minutes East along the West side of the
                           Vermilion River a distance of 237.1 feet, thence
                           running North 6 degrees 53 minutes West along the
                           West side of the Vermilion River a distance of 145.7
                           feet, thence running North 70 degrees 06 minutes West
                           a distance of 826.0 feet, thence running South 3
                           degrees 20 minutes West a distance of 369.7 feet to
                           the North side of the property of LESSEE, thence
                           running South 70 degrees 06 minutes East a distance
                           of 488.9 feet along the North side of the property of
                           LESSEE, thence running South 68 degrees 07 minutes
                           East a distance of 322.3 feet along the North side of
                           the Property of the LESSEE to the point of beginning;
                           said property being shown on the Plat of Survey of
                           Moy O. Lewis, Registered Surveyor, dated October 10,
                           1970, a copy of which is attached hereto and paraphed
                           "no Varietur" for identification herewith.

                  2. This lease shall be for a monthly rental of $200.00 per
month, payable monthly in advance on the first day of each month, beginning
January 1, 1971, said payments to be made by check or money order payable to
Ethlyn C. Theall and mailed to Lessors at Route 3, Box 133A, Abbeville,
Louisiana, provided, however, that upon the death of the said Ethlyn C. Theall,
LESSEE is given the right and option of making all payments after notification
of said death by depositing the monthly payments to the account of LESSORS in
the First National Bank of Abbeville, Louisiana.

                  3. Upon the death of the original LESSORS, the LESSEE is given
the right and option of continuing to make the payments under this lease monthly
by deposit in the Bank depository above set forth, or making said rental
payments on an annual basis payable annually in advance by deposit in the Bank
depository above set forth.

                  4. As an additional consideration herein, LESSEE is given the
right and option to renew this lease for an additional term of forty-five years
after the primary term hereof. It is agreed that the mere paying of the rent by
LESSEE for the month beginning


                                        2

<PAGE>



<PAGE>



January 1, 2016, shall operate to exercise this option by LESSEE and no further
notice shall be necessary.

                  5. This lease is granted to LESSEE to use the said property
for any purpose which he may desire. Provided, however, that should LESSEE
construct a boat slip on said property, said slip is to be constructed no nearer
than 100 feet to the South side of the property herein leased.

                  6. LESSEE binds and obligates itself to bulkhead any slip
which it may dig on the subject property should bulkheading become necessary. It
is agreed that under the terms of this lease, bulkheading shall be necessary
should the said slip wash out so as to encroach nearer than one hundred feet to
the South line of said property and twenty-five feet to the North line of said
property.

                  7. The parties hereto agree that should LESSEE fail to make
any rental payment or payments as they come due, such failure shall not be
grounds for cancellation of this lease until LESSORS shall first give LESSEE
notice of its failure to pay the said rental payment or payments by Registered
U.S. Mail addressed to LESSEE at Lewes, Delaware, after which notice LESSEE
shall have thirty days within which to bring all rental payments up to date.
Should LESSEE fail to pay the late rental payments within thirty days of said
notice, then in that event this failure shall be grounds at LESSORS' option to
cancel this lease.

                  8. It is agreed and understood that this lease does not grant
to LESSEE the right to use the road belonging to LESSORS which connects this
property with the public road on the West. Should LESSEE desire to use this road
in the future, said use


                                        3


<PAGE>


<PAGE>


shall be subject to negotiation between the parties which use may or may not be
granted as the LESSORS see fit.

                  THUS DONE AND SIGNED at Abbeville, Vermilion Parish,
Louisiana, on this 10th day of November, 1970.

WITNESSES:

- ------------------------                       -----------------------------
Gladys R. Gaspard                              Purvis Theall

- ------------------------                       -----------------------------
Debra Pierce                                   Ethlyn Cessac

                                               SEACOAST PRODUCTS, INC.

                                               By: _________________________
                                                        Otis H. Smith

                           ----------------------------
                           Marcus A. Broussard, Jr.
                           Notary Public


                                        4


<PAGE>




<PAGE>


                                 LEASE AGREEMENT

UNITED STATES OF AMERICA

STATE OF LOUISIANA

PARISH OF VERMILION

               This agreement made and entered into by and between THE CITY OF
ABBEVILLE, LOUISIANA, a Municipal Corporation (hereinafter called "LESSOR"),
herein represented by its Mayor, R. Brady Broussard, he being duly authorized
herein by virtue of the ordinance of the City Council of the City of Abbeville,
dated the 4th day of January, 1994 a certified copy of which is attached hereto
and made a part hereof, and ZAPATA HAYNIE CORPORATION (hereinafter called
"LESSEE"), a domestic corporation, domiciled in and having its principal place
of business in Vermilion Parish, Louisiana, herein represented by Vernon D.
Niven, its General Manager, he being duly authorized in the premises by virtue
of a resolution of the Board of Directors of said corporation, a certified copy
of which is attached hereto and made a part hereof;

               WHEREAS, the LESSOR currently owns and operates the land premises
known as the Abbeville Municipal Airport (hereinafter called the "Airport"),
located in Abbeville, Louisiana, and;

               WHEREAS, the LESSOR deems it advantageous to itself and to its
operations of the Airport area to lease to LESSEE certain rights, privileges,
and uses herein as necessary to conduct its business as hereinafter set forth;


<PAGE>


<PAGE>


               NOW, THEREFORE, LESSOR and LESSEE, for and in consideration of
the covenants and mutual agreements hereinafter contained, do hereby covenant
and agree as follows:

                                    ARTICLE I
                         PREMISES, TERMS, AND PRIVILEGES

DEFINITIONS:

               "Abbeville Municipal Airport": That certain area administered by
the City pursuant to covenants and conditions contained in those certain
contracts, agreements, resolutions and actions of the City of Abbeville,
Louisiana, constituting agreements between the City and the United States of
America and its agents, including, but not limited to, the Federal Aviation
Administration (FAA).

               "LESSOR": The City of Abbeville, Louisiana, by and through its
duly constituted agent, the Mayor, shall be considered the LESSOR for all
purposes of this lease.

               "TERMS": The terms of this contract area binding on the heirs,
successors, administrators, trustees and assigns of LESSEE, except where
otherwise noted in this instrument.

1.01 LEASED AREA:

               The LESSOR does hereby lease the premises containing a total
approximately 23,500 square feet, more particularly described as:

               A certain tract or parcel of ground together will all buildings
               and improvements thereon situated located at the Abbeville
               Municipal Airport and being generally described as the "Old
               Hangar" building being the Eastern most edge of the public
               parking lot, thence Easterly along a line parallel to the front
               of the "Old Hangar" a distance of 235 feet and having a depth
               between parallel lines of 100 feet.

                                        2


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<PAGE>


Said tracts are more particularly shown and designated on a plat of survey
prepared by John B. Benoit, Registered Surveyor, dated October 25, 1983, a copy
of which is attached hereto and marked as Exhibit A, all hereinafter referred to
as the "premises", all within the Abbeville Municipal Airport, and LESSEE hereby
leases the said premises from LESSOR, which property pursuant to the provisions
of LSA-R.S.33:4712, has been duly declared as surplus and as no longer
necessary for the public use and purposes as reflected in the ordinance of the
City of Abbeville dated the 4th day of January, 1994, a certified copy of which
is attached hereto and made a part hereof.

               Subject to the terms, covenants and conditions embodied below,
the LESSEE shall have the right and privilege to construct and maintain
improvements upon the leased premises.

1.02 TERMS:

               This lease is to be for a primary term of ten (10) years
commencing on January 1, 1994, and ending on December 31, 2003.

1.03 RENTAL OBLIGATION:

               LESSEE herein agrees to pay to LESSOR, in advance, the sum of SIX
HUNDRED AND 00/100 ($600.00) DOLLARS, per month, payable in equal monthly
payments for each month, during the term of this lease.

               Monthly rentals shall be paid in advance on or before the first
(1st) day of each month, the first of such monthly rental payments (or
proportionate part thereof, should the lease be effective on a day other than
the first day of the month) being due on the effective date of this lease.


                                        3

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<PAGE>

               The basic rent and such additional charges as accrued shall be
paid by the first (1st) day of each month without notice, demand, counterclaim,
setoff, deduction or defense, and without abatement, suspension, deferment or
diminution or reduction by reason of, and, except as otherwise provided in this
agreement, the obligations and liabilities of the LESSEE shall not be affected
by any circumstances or occurrences, including:

               (a) Any damages to or destruction of the premises or any part
thereof;

               (b) Any restriction or prevention of, or any interference with,
any use of the leased property or any part thereof;

               (c) Any claim LESSEE has or might have against LESSOR;

               (d) Notice of termination of leasehold, whether by LESSOR or
LESSEE.

1.04 OPTION TO EXTEND:

               LESSEE is hereby granted an option to extend the lease for ten
(10) years until December 31, 2013, with such option to be exercised in writing
delivered to and received by the Mayor at his office, at least sixty days before
the end of the previous term. Extension shall be upon the terms and conditions
of this agreement.

1.05 RENTAL ESCALATION FOR OPTION PERIOD:

               Without waiving other rental escalation provisions in this
contract, monthly rentals shall be adjusted annually during the primary and
extension periods by an amount which is equivalent to the percent change in the
Consumer Price Index (CPI) of the preceding calendar year's average,
specifically defined as the Consumer Price Index (U.S. Average, All Urban
Consumers, All Items) 1967 = 100 Base as compiled by the Bureau of Labor
Statistics. This means that at the anniversary date of November 1, 1994, and
annually


                                        4


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<PAGE>


thereafter, the rent will be adjusted on the percent change in the CPI of the
preceding calendar year (January - December).

        Example:

        1.     First Anniversary:           Base rent X CPI = adjustment + base
                                            rent = rent for second year.

        2.     Second Anniversary:  Second year's rent X CPI = adjustment +
                                    second year's rent = rent for third year ...
                                    etc., annually until lease expiration.

1.06 SERVICE CHARGE:

               Rentals, fees, charges assessed pursuant to this lease are due
and payable monthly, no later than the first (1st) day of the month. A service
charge of five (5%) percent of the rental payment will be assessed for any
rental payment made after the tenth (10th) day of the month.

1.07 DEPOSIT:

               In addition to the initial rental payment called for in the
preceding paragraph, LESSEE shall deposit with LESSOR the sum of the amount
equivalent to one month's rent which deposit shall be retained during the lease
term and, upon termination of the lease, returned to LESSEE less and except and
this will serve to authorize LESSOR'S withholding from such funds, any monies
then due and owing to the LESSOR by LESSEE under the terms of this lease,
including, but not limited to, any costs of restoring the premises to the
condition called for under the terms hereof, as well as any other indebtedness
caused, or charges owing, by LESSEE to LESSOR or to any third parties.


                                        5

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<PAGE>


1.08 FUEL FLOW FEE:

               LESSEE shall pay to LESSOR a fuel flowage fee of $0.04 per gallon
for every gallon of fuel purchased by LESSEE for its airplane operations. Said
fees shall be payable by LESSEE to LESSOR on the first day of each month for the
fuel purchased in the immediately preceding month. All payments of said fees by
LESSEE to LESSOR must be accompanied by copies of LESSEE'S purchase invoices
and/or delivery schedules.

1.09 UTILITIES:

               LESSEE shall provide and pay, or cause to be paid, all charges
for water, heat, gas, electricity, sewers, and any and all other utilities used
on the premises throughout the term of this lease, including any connection
fees. LESSOR shall make water, electricity, and sewer service available to
LESSEE for connection.

1.10 TAXES:

               Upon receipt of written notice of any taxes, impositions, and
surcharges upon the premises, LESSEE agrees to pay and discharge promptly,
before delinquency, any and all such taxes, impositions, and surcharges imposed
by taxing agencies against the leasehold premises and any personal property,
tools, equipment, furniture, fixtures, and inventory belonging to LESSEE.

1.11 USE AND USE CONFLICT:

               The premises herein leased are to be used and occupied solely for
the purposes of operations and maintenance of LESSEE'S aircraft and no other use
of the premises is permitted.


                                        6

<PAGE>


<PAGE>


               Neither the leased premises nor any portion thereof shall be
sublet, nor shall this lease or any interest therein be assigned, hypothecated
or mortgaged by LESSEE, and any attempted assignment, subletting, hypothecation
or mortgaging of this lease shall be of no force effect, and shall confer no
rights upon any assignee, sublessee, mortgagee or pledgee, but shall constitute
a material breach of this contract.

               In the event that LESSEE shall become incompetent, bankrupt or
insolvent, or be dissolved, or should a guardian, trustee, or receiver be
appointed to administer LESSEE'S business or affairs, neither this lease nor any
interest herein shall become an asset of such guardian, trustee, or receiver,
this lease shall immediately terminate and end.

1.12 PEACEFUL POSSESSION:

               LESSEE shall peacefully have, hold, and enjoy the leased
premises, subject to the terms and conditions herein, and provided LESSEE pays
the rentals and performs all of its covenants and agreements herein agreed to.

1.13 OFFSTREET PARKING:

               a. The LESSEE shall make provision for automobile parking for its
employees, visitors, and other invitees on the demised premises by utilizing the
parking areas available at the Abbeville Municipal Airport. No parking shall be
permitted on the streets immediately adjacent to the leased premises.

               b. Each parking space shall be designated by white lines painted
upon the paved surface.

               c. Parking for handicapped persons will be provided by the LESSEE
and such spaces shall be clearly designated as handicapped parking.


                                        7

<PAGE>


<PAGE>


1.14 VEHICLE LOADING:

               All provisions for loading and maneuvering of vehicles necessary
to the operation of LESSEE'S business shall be conducted as near as practical
within the boundaries of the leased premises or upon the public areas.

1.15 BUILDING HEIGHTS:

               Building heights for any new construction anticipated or planned
by LESSEE shall be limited to a maximum of fifty (50') feet above the ground
level. This limitation includes phasial extensions of any building erected on
the leased premises or other extension attached to any such building.

1.16 TYPE OF CONSTRUCTION:

               a. All buildings shall be framed with reinforced concrete or
masonry, structural steel, structural aluminum or wood, which has been
satisfactorily treated to resist fire, rot, and insects. Siding shall consist of
masonry, glass, enameled steel, or treated wood. Common masonry and treated wood
siding shall be kept neatly painted.

               b. All buildings shall conform to all local building codes and
ordinances.

1.17 PIPES:

               With the exception of hoses and movable pipes used for
irrigation, LESSEE shall neither install nor maintain water, gas, sewer, or
drainage pipes above the surface of the ground. This restriction does not apply
to pipes installed or maintained within structures to be constructed by the
LESSEE on the leased premises.


                                       8


<PAGE>


<PAGE>

                                   ARTICLE II
                             REPAIRS AND ALTERATIONS

2.01 LESSEE'S DUTY TO REPAIR:

               LESSEE shall, through the term of this lease, take good care of
the leased premises and the fixtures and appurtenances therein and at its sole
cost and expense make all nonstructural repairs thereto as and when needed to
preserve them in good working order and condition, damage from the elements and
fire excepted. In this regard, LESSEE is responsible for the maintenance and
repair at LESSEE'S sole cost and expense of all windows, doors, plumbing,
electrical, light fixtures, plumbing, fixtures, air conditioning system,
painting of interior and exterior wall when needed, floor covering and other
nonstructural repairs.

               Damage or injury to the premises, fixtures, appurtenances whether
requiring structural or nonstructural repairs, caused by or resulting from
carelessness, omission, neglect, or improper conduct of LESSEE, its servants,
employees, invitees or licensees, shall be repaired promptly by LESSEE at its
sole cost and expense, to the satisfaction of LESSOR.

               LESSEE herein agrees to promptly notify LESSOR of any accident
to, or any defects in, utility system or structure used in common with other
tenants, including, but not limited to, water pipes, drainage pipes, air
conditioning ducts.

               The City of Abbeville is expressly granted the right of access to
any such system or structure used in common, and the right to enter the premises
to inspect and repair, if necessary, any such system(s) or structure(s) for its
work or repair, its cost of same


                                        9

<PAGE>


<PAGE>


shall be apportioned among the tenant(s) served by such system(s) or
structure(s). The reasonable cost of such repair shall be determined by the
Mayor.

2.02 ALTERATIONS:

               LESSEE is granted the right to make alterations to the premises
other than structural repairs, at LESSEE'S sole cost and expense, subject to the
following terms and conditions:

               (a) LESSEE must first obtain the written consent of LESSOR.
LESSOR reserves the right to reject any proposed extension, repair or
alteration, any particular contractor or each and every subcontractor or the
complete project.

               (b) Ultimate title to an alteration properly consented to by
LESSOR will rest with LESSOR immediately upon approval and will remain in
LESSOR's possession at termination of LESSEE'S tenancy.

               (c) Trade fixtures, movable furniture, and other service
equipment of LESSEE peculiar to LESSEE'S business are not to be included in
alterations, and must removed at his option and convenience, provided LESSEE is
not in default of lease obligations.

               LESSOR reserves the right to demand that LESSEE restore the
premises to reasonably the same condition and state as the premises were found
prior to making such alterations, in a manner acceptable to LESSOR, and to
demand that LESSEE pay all costs of such restoration.


                                       10

<PAGE>


<PAGE>


               LESSEE further agrees that any damages as may be caused by the
installation or removal of trade fixtures discussed in condition (c) above, will
bind LESSEE to repair said damage expeditiously at LESSEE'S sole expense.

               LESSEE maintains and reserves the right to make alterations and
remodeling changes, provided said work does not interfere with LESSEE'S
day-to-day operations and business.


                                   ARTICLE III
                                USE RESTRICTIONS

3.01 GENERAL:

        a. No land, alteration, or structure occupied or erected by the LESSEE
shall be used or occupied in any manner which could create conditions:

              1. Adversely affecting the health, comfort, or safety of members
              of the general public or other tenants of the LESSEE; or

              2. Adversely affecting the beneficial enjoyment and use of
              properties leased to LESSOR'S other tenants.

        b. Prohibited uses include, but are not limited to, those which create:


              1. Fire hazards;
              2. Explosive hazards;
              3. Excessive noise;
              4. Excessive vibration;
              5. Excessive shock;
              6. Smoke, dust, pungent odors, noxious emissions constituting air
                 pollution;

                                       11

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<PAGE>


              7. Electrical disturbances; and
              8. Excessive liquid or solid refuse, waste, or emissions;
              9. Environmental hazards.

3.02 ULTRA-HAZARDOUS ACTIVITIES INCLUDING FIRE AND EXPLOSIVE HAZARDS:

               No ultra-hazardous activities including those creating fire or
explosive hazards endangering life or property shall be conducted on the leased
premises by the LESSEE.

3.03 NOISE LEVELS:

               At no point on the leased premises shall the sound pressure of
any individual plant or operation conducted by the LESSEE (other than operation
of motor vehicles, aircraft, or other conveyances of transportation) exceed the
decibel levels in the designated octave bands shown below:

                                            Maximum Permitted Sound
        Octave Band Cycles                     Level in Decibels
            Per Second                       RE 0.0002 dynes/cm/2
        -------------------                   -------------------
        0    -  300                                75
        300  - 1200                                55
        1200 - 4800                                45
        4800 and above                             40

3.04  VIBRATION OR SHOCK:

               No vibration or shock perceptible to a person of normal
sensibilities shall be permitted within fifty (50') feet of any property line
delineating the leased premises.


                                       12


<PAGE>


<PAGE>


3.05 AIR POLLUTION:

        a. Any use of the premises by the LESSEE, which will produce smoke, gas,
dust, odor, fumes, aerosols, particles, products of combustion, or other
atmospheric pollutant, shall be conducted within a completely enclosed building.

        b. Visible emissions of smoke, which exceed Ringlemann No. 1 on the
Ringlemann Chart of the U.S. Bureau of Mines other than motor vehicle emissions
from conveyances of transportation, shall not be permitted. This requirement is
applicable to trash and waste material disposal. Windborne dust, sprays, and
mists originating in any plants upon the leased premises will not be permitted.

        c. No plant or operation shall discharge toxic or noxious matter into
the atmosphere.

        d. Emission of odors detectable at any point beyond the property line of
any plant erected by LESSEE shall not be permitted.

3.06 DUST CONTROL:

        All ground areas not covered by structures shall be landscaped or
surfaced with concrete, asphaltic concrete, asphalt oil, or other dust-free
surfacing. These areas shall be maintained in good condition by LESSEE and shall
at all times be kept free of weeds, trash, dust, and other debris. They shall be
properly drained and graded. This dust control shall be accomplished before the
issuance of a certificate of occupancy.


                                       13

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<PAGE>


3.07 HEAT OR GLARE:

               Any operation producing intense glare or heat shall be performed
within an enclosed or screened area in such a manner which prevents the glare or
heat so emitted from being discernible from any point on the property line of
the leased premises.

3.08 ILLUMINATION:

        a. The maximum height of any lighting standard shall be limited to
thirty (30') feet above ground level.

        b. The intensity of illumination shall be limited to 10 foot-candles or
0.1 lumens per square foot for open areas or surfaces visible at the property
line.

        c. The design and location of exterior lighting shall comply in all
respects to the requirements of the Federal Aviation Administration or any
successor agencies and other governmental agencies having applicable
jurisdiction with respect to height, type, and placement of lighting standards
as they may affect the safety of flight operations at the airport.

3.09 SIGNS:

               The following regulations shall apply to all commercial signs
displayed for observation from outside a building whether displayed on, near, or
within a building:

               a.     Permitted Signs: LESSEE'S commercial signs shall be
                      limited to those identifying the uses conducted on the
                      site and to those necessary for directional purposes. The
                      size, design, and location of all signs shall require the
                      written approval of the LESSOR or its authorized agent
                      prior to installation. On-premise billboards and flashing
                      signs are not permitted.

               b.     Construction: All signs shall comply with all building
                      codes of the City of Abbeville and with all rules and
                      regulations of the


                                       14

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<PAGE>


                      Federal Aviation Administration or any other successor
                      agencies.

3.10 REFUSE AND TRASH:

               No refuse or trash shall be kept, stored, or allowed to
accumulate on the leased premises.

3.11 SEWAGE DISPOSAL SYSTEMS:

               No cesspool, septic tank, or other sewage disposal system or
device shall be installed, maintained, or used upon any parcel without LESSOR'S
prior written approval and the prior written approval of the State of Louisiana.


                                   ARTICLE IV
                             INDEMNITY AND INSURANCE

4.01 INDEMNITY AND NONCLAIM:

               LESSEE hereby declares itself fully familiar with the physical
condition of the leased premises and the improvements, fixtures, and equipment
leased herein, and declares that said premises were in good condition when
possession of same was accepted.

               LESSEE and its heirs, successors, and assigns promise to hold
harmless and indemnify LESSOR from and against any and all claims by and on
behalf of any person, of whatsoever kind or nature, whether legal or equitable,
including governmental bodies, arising from the conduct or management of or from
any work or thing done and from any and all conditions of the leased premises or
other structures, sidewalks, driveways, or parking areas and facilities on the
leased premises or any street, curb, or sidewalk adjoining thereon, (excluding
common areas maintained by LESSOR) including environmental conditions and from
all costs, attorney's fees, expenses, and liabilities incurred in or about


                                       15


<PAGE>


<PAGE>


any such claim or action or proceeding brought thereon except any and all
actions or proceedings arising out of the negligence whether sole, joint or
concurrent or willful act of LESSOR, its employees, agents, representatives, or
invitees from which LESSOR shall defend, indemnify and hold LESSEE harmless; and
in the event that any action or proceeding brought against the LESSOR by reason
of such claim, the LESSEE upon notice from the LESSOR covenants to resist and
defend such actions or proceedings.

               LESSEE agrees for itself and its heirs, successors, and assigns
that it will not bring suit against the LESSOR or assign any cause or action
resulting from accident, fire, noise, or disturbance from the operation,
maintenance, accident, crash, or crash landing of any airplane in the Abbeville
Municipal Airport area or in the vicinity of the Abbeville Municipal Airport, or
during any operation of aircraft over the premises, except any such cause or
action arising out of the negligence or willful act of LESSOR, its employees,
agents, representatives, or invitees.

4.02 FIRE AND OTHER RISKS INSURANCE:

               LESSEE, at his sole cost and expense, shall, throughout the term
of this lease, keep or cause to be kept all improvements now or hereafter
located upon the leased premises insured for the mutual benefit of LESSOR and
LESSEE against loss or damage by fire and against loss or damage by other risks
embraced by "extended coverage" and against civil commotions, riots, vandalism,
and malicious mischief in an amount equal to the actual replacement cost of such
improvements, including costs of replacing excavations and foundation, but
without deduction for depreciation (hereinafter called "Full Insurable Value").
LESSEE shall name the City of Abbeville as co-payee. In the event a dispute
arises


                                       16


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<PAGE>


as to the Full Insurable Value, which cannot be resolved by agreement, an
appraisal of the leased premises and improvements thereon shall be made by an
appraiser selected by LESSEE and reasonably acceptable to LESSOR to determine
the Full Insurable Value, as defined in this provision. The resulting
determination shall be conclusive between the parties for the purposes of this
section. The expense of this appraisal shall be borne by LESSEE.

4.03 OBLIGATIONS OF LESSEE:

               During the term hereof, except as provided in Section 4.05 below,
and should the improvements constructed by LESSEE upon the leased premises be
damaged or destroyed in whole or in part by fire or other casualty, LESSEE shall
give prompt notice to LESSOR. LESSEE, at its own cost and expense, shall
promptly repair, and rebuild the same to the extent as the prior value of, and
as near as is practicable to the character of the buildings and improvements
existing immediately prior to such damage. Such repairs, replacements, or
rebuilding shall be made by LESSEE and in accordance with the following terms
and conditions:

        a.     Prior to commencing such repairs, LESSEE shall deliver to LESSOR
               a set of the preliminary construction plans and specifications
               for LESSOR'S approval. In the event the preliminary plans and
               specifications are disapproved, LESSEE will be notified in
               writing. The notice shall specify in detail the reasons for the
               disapproval. LESSOR shall specify the corrections to the
               specifications and plans.

        b.     Upon approval of the preliminary plans and specifications by
               LESSOR, LESSEE shall prepare, or cause to be prepared, final
               working plans and specifications. These shall conform to the
               preliminary plans and specifications. Upon completion of the
               final working plans and specifications, LESSEE shall submit the
               same to appropriate governmental agencies for approval. Upon
               approval by such agency and the issuance of permits for the
               commencement of construction, LESSEE shall deliver to LESSOR one
               complete set of the final


                                       17

<PAGE>


<PAGE>


               working plans and specifications, as approved by the appropriate
               governmental agencies. Changes from the preliminary plans and
               specifications shall be considered to be within the scope of the
               preliminary plans and specifications if such changes are made to
               comply with suggestions, requests, or requirements of the
               governmental agencies.

        c.     Prior to commencing construction, LESSOR may require LESSEE to
               furnish a performance and payment bond and, if requested,
               Builder's Risk Insurance.

        d.     Upon compliance with the foregoing, and after settlement shall
               have been made with the insurance company or companies, and said
               proceeds of such insurance policy or policies shall have been
               paid to LESSEE, LESSEE shall commence such repair, replacement,
               or rebuilding within a reasonable time and shall continue such
               work with reasonable diligence until completion.

4.04 INSURANCE PROCEEDS:

               Upon receipt by LESSEE and LESSOR of the proceeds of the
insurance policy or policies, LESSEE and LESSOR shall deposit same in an escrow
account to pay for the cost of such repair, replacement and rebuilding. Such
proceeds shall be disbursed by LESSEE and LESSOR during construction to pay the
cost of such work.

               If the amount of such insurance proceeds is insufficient to pay
the costs of the necessary repair, replacement, or rebuilding of such damaged
improvements, LESSEE shall pay any additional sums required and if the amount of
such insurance proceeds is in excess of the costs thereof, the amount of such
excess shall be retained by LESSEE.

4.05 CANCELLATION OF LEASE:

               Should the improvements on the leased premises be damaged or
destroyed in whole or in part by fire or other casualty during the initial term
or during the option term of this lease, LESSEE shall be relieved of the
obligation to repair, replace, and rebuild the same and shall have the right to
cancel this lease by giving LESSOR written notice of its election to do so with
thirty (30) days after the date of any such damage or destruction. In


                                       18

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<PAGE>


such event, this lease shall terminate as of the date of such destruction and
the insurance proceeds received or receivable under any policy of insurance
shall be paid to and retained by LESSOR. All rents payable under this lease
shall be prorated and paid to the date of such termination. The receipt of all
insurance proceeds by LESSOR will relieve LESSEE from any responsibility to
restore the leased premises to their former condition.

4.06 CONTENTS:

               Insurance on contents of building is sole responsibility of the
LESSEE.

4.07 PUBLIC LIABILITY INSURANCE:

               LESSEE agrees to indemnify and hold harmless LESSOR from any and
all claims, damages, causes of action, costs and expense, including attorney's
fees resulting from or related to LESSEE'S use and occupancy of the leased
premises and the condition thereof, including environmental conditions, except
any such claims, damages, causes of action, costs and expenses arising out of
the negligence or willful act of LESSOR, its employee, agent, representative, or
invitee, from and against which LESSOR shall indemnify and hold LESSEE harmless.
In this connection, LESSEE shall carry and maintain public liability insurance
in minimum amounts of ONE MILLION DOLLARS ($1,000,000.00) for each accident and
THREE HUNDRED THOUSAND DOLLARS ($300,000.00) property damage in which LESSOR
shall be named as additional insured and as a co-insured. Such policies shall
provide that same shall not be canceled without thirty (30) days prior written
notice to LESSOR, and LESSOR shall be furnished, within thirty (30) days from
the effective date of this lease, with a copy of such proof of insurance. LESSOR
reserves the right to


                                       19

<PAGE>


<PAGE>


accept or reject the insurance company issuing such policy or policies based on
LESSOR's prior experience with any particular insurance company.

4.08 POLICIES AND MODIFICATIONS:

               Copies of all LESSEE'S policies and modifications shall be
deposited with LESSOR no later than forty-five (45) days after the execution of
this lease.

                                    ARTICLE V
                                  ENCUMBRANCES

5.01 ENCUMBRANCES:

               LESSEE may encumber its leasehold interest by the execution and
delivery of a mortgage. The mortgagee of such mortgage may deliver to LESSOR a
written notice specifying:

                      a.     The amount of the obligation secured by the
                             mortgage and the date of the maturity or maturities
                             thereof, and

                      b.     The name and address of the mortgagee.

               After receipt of such notice, LESSOR shall serve mortgagee, by
certified mail at the last address furnished by mortgagee, a copy of every
notice or demand served by LESSOR upon LESSEE under the terms and provisions of
this lease so long as such mortgage is in effect.

5.02 MORTGAGEE'S RIGHT:

               Upon receipt of a notice or demand, in accordance with Section
5.01 above, mortgagee shall have one hundred eighty (180) days after receipt of
such notice within which, at mortgagee's election, to:

                                       20

<PAGE>


<PAGE>


               a.      Cure any default, if it can be cured, by the payment or
                       expenditure of money; or

               b.      Perform such other action as may be necessary to cure the
                       default; or

               c.      Institute foreclosure proceedings and prosecute same
                       diligently to conclusion.

5.03 RIGHTS ON FORECLOSURE:

        In the event of foreclosure by mortgagee, the purchaser at the
foreclosure sale, or the person acquiring LESSEE's interest by virtue of or in
lieu of foreclosure, shall succeed to all of LESSEE's rights, interests, duties,
and obligations under this lease.

5.04 LESSEE'S RIGHT TO ENCUMBER:

        Nothing herein shall be construed to prohibit LESSEE from encumbering
LESSEE's leasehold interest provided, however, that such leasehold interest
shall not be encumbered beyond the expiration date of the primary term of this
lease. Provided LESSOR shall not be liable in any manner to any mortgagee except
as otherwise herein provided.


                                   ARTICLE VI
                TERMINATION, CANCELLATION, ASSIGNMENT OF TRANSFER

6.01 CANCELLATION:

        Subject to the provisions of Article V above, this lease shall be
subject to cancellation by LESSOR in the event LESSEE shall:

        a.     Be in arrears in the payment of the whole or any part of the
               rental amounts agreed upon hereunder for a period of ten (10)
               days after LESSOR has notified LESSEE in writing that payment was
               not received when due;

        b.     File in any court a petition in bankruptcy or insolvency or for
               the appointment of a receiver or trustee of all or a portion of
               LESSEE's property;

                                       21

<PAGE>


<PAGE>


        c.     Make any general assignment for the benefit of creditors;

        d.     Default in the performance of any of the covenants and conditions
               required herein (except rental payments) to be kept and performed
               by LESSEE, and such default continues for a period of thirty (30)
               days after receipt of written notice from LESSOR to cure such
               default, unless during such thirty (30) day period, LESSEE shall
               commence and thereafter diligently perform such action as may be
               reasonably necessary to cure such default;

        e.     LESSEE abandons the premises or leaves the premises vacant or
               unoccupied for thirty (30) consecutive days;

        f.     LESSEE permits the leased premises to be used for any
               unauthorized or unlawful business or purpose;

        g.     Be adjudged bankrupt in involuntary bankruptcy proceedings; or

        h.     Be made a party to any receivership proceedings in which a
               receiver is appointed for the property or affairs of LESSEE where
               such receivership is not vacated within sixty (60) days after the
               appointment of such receiver.

        In any of the aforesaid events, LESSEE may re-enter to take immediate
possession of the leased premises and remove LESSEE's effects or assert its
lessor's liens upon them, as provided in paragraph 6.05, without being deemed
guilty of trespassing.

6.02 REPOSSESSING AND RELETTING:

        In the event of default by LESSEE hereunder which shall remain uncured
after the required notices have been given pursuant to this lease, and for such
time as provided herein, LESSOR may at once thereafter, or at any time
subsequent during the existence of such breach or default:

        a.     Re-enter the demised premises or improvements or any part of them
               and repossess them; and

        b.     Either cancel this lease by notice or without canceling this
               lease, relet the leased premises or any part thereof upon such
               terms and conditions as shall appear advisable to LESSOR. If
               LESSOR shall proceed to relet the leased premises and the amounts
               received from reletting the leased premises during


                                       22


<PAGE>


<PAGE>


               any month or part thereof be less than the rent due and owing
               from LESSEE during such month or part thereof under the terms of
               this lease, LESSEE shall pay such deficiency to LESSOR
               immediately upon calculation thereof, providing LESSOR has
               exercised good faith in terms and conditions of reletting.
               Payment of any such deficiencies shall be made monthly within ten
               (10) days after receipt of notice of deficiency.

6.03 ASSIGNMENT AND TRANSFER:

        LESSEE shall have the right and privilege to assign or transfer this
lease subject to the prior written approval of LESSOR.

6.04 SUBLEASING:

        LESSEE shall have the right to sublease all or any part of the space
demised hereunder for the same purposes permitted under the terms and provisions
of this lease, provided LESSEE first obtains LESSOR's consent, such consent
shall not be unreasonably withheld. Any such sublease shall be subject to the
same conditions, obligations, and terms as set forth herein and LESSEE shall be
responsible for the observance by its sublessees of the terms and covenants
contained in this lease.

6.05 LESSOR'S LIEN AND PRIVILEGE:

        It is expressly agreed that, in the event of default by LESSEE
hereunder, LESSOR shall have a lien and privilege upon all goods, chattels,
personal property, or equipment of any description belonging to LESSEE or to any
other person which are placed in or become a part of the leased premises as a
security for rent due and to become due for the remainder of the lease term,
which lien shall not be in lieu of or in any way affect the statutory lessor's
lien given by law.

        Default on rental payments entitles LESSOR, at its option, to take
whatever lawful action reasonably necessary to protect LESSOR's interest in said
property, including the

                                       23

<PAGE>


<PAGE>


storing of goods, secured by a lessor's lien for nonpayment of rent for a
reasonable time, as well as the selling of such goods at public or private
auction for rental due, without waiving LESSOR's right to the total rental due.


6.06 CANCELLATION BY LESSEE:

        LESSEE shall have the right to cancel this lease agreement upon
providing to LESSOR written notice of its intention to do so which shall be
received by LESSOR at least sixty (60) days prior to LESSEE's proposed
cancellation date. Attached to said notice shall be certified funds equal to
twelve times the monthly rental amount for the month in which the cancellation
is to be effective. LESSEE shall have the right upon proper cancellation and
satisfaction of all other rental obligations to LESSOR, of removing all movable
items located on the leased premises, provided that LESSOR has not exercised any
statutory or contractual of right of sequestration.


                                   ARTICLE VII
                                  MISCELLANEOUS

7.01 ATTORNEY'S FEES:

        In case LESSEE defaults in the performances of any of the terms,
covenants, agreements, or conditions contained in this lease and LESSOR places
the enforcement of the term of this lease, or any part thereof, or the
collection of any rent due, or to become due hereunder, or recovery of
possession of leased premises in the hands of an attorney, or files suit upon
same, LESSEE agrees to pay LESSOR reasonable attorney's fees and payment of same
shall be secured in a like manner as herein provided as to lien for rent due.


                                       24

<PAGE>

<PAGE>


7.02 LESSOR'S REPRESENTATION AND WAIVER:

        Any representations by LESSOR regarding LESSEE's leasehold interest must
be embodied in this writing. Any amendments to this lease must be in writing and
signed by both parties.

        The waiver by LESSOR or LESSEE of performance of any provisions of this
agreement shall not amount to a future waiver of strict performance of such
provision or any other provision of this agreement.

7.03 ANTI-DISCRIMINATION CLAUSES MANDATED BY FEDERAL GOVERNMENT:

        a. The LESSEE assures that it will undertake an affirmative action
program, as required by 14 Code of Federal Regulations Part 152, Subpart E, to
insure that no person shall on the grounds of race, color, creed, national
origin, or sex be excluded from participating in any employment activities
covered by 14 Code of Federal Regulations Part 152, Subpart E. The LESSEE
assures that no person shall be excluded on these grounds from participating in
or receiving the services or benefits of any program or activity covered by this
subpart. The LESSEE assures that it will require that its covered
suborganizations provide assurances to the LESSEE that they similarly undertake
affirmative action programs and that they will require assurance from their
suborganizations, as required by 14 Code of Federal Regulations Part 152,
Subpart E, to the same effect.

        b. The LESSEE for himself, his personal representatives, successors in
interest, and assigns, as a part of the consideration hereof, does hereby
covenant and agree as a covenant running with the land that: (1) no person on
the grounds of race, color, or national origin shall be excluded from
participating in, denied the benefits of, or be otherwise subjected


                                       25

<PAGE>


<PAGE>


to discrimination in the use of said facilities, (2) that in the construction of
any improvements on, over, or under such land and the furnishing of services
thereon, no person on the grounds of race, color, or national origin shall be
excluded from participating in, denied the benefits of, or otherwise subject to
discrimination, (3) that the LESSEE shall use the in compliance with all other
requirements imposed by or pursuant to CFR Part 21, Nondiscrimination in
Federally Assisted Program of the Department of Transportation, and as said
regulations may be amended.

        c. That, in the event of breach of any of the preceding
nondiscrimination covenants, the City of Abbeville shall have the right to
terminate this lease and to reenter and repossess said land and the facilities
thereon, and hold the same as if said lease had never been made or issued.


7.04 LAWS AND REGULATIONS:

        Further, LESSEE shall keep and maintain the premises in a clean and
healthful condition and comply with all laws, ordinances, orders, rules and
regulations, whether State, Federal, or Municipal, and shall hold LESSOR
harmless and indemnified for any violation of same on the leased premises or
which are caused by LESSEE.

7.05 OUTSIDE STORAGE PROHIBITED:

        Storage of vehicles, equipment, supplies, or any other items outside of
the leased building(s) is prohibited, unless the storage area is fenced and
approved by the LESSOR. For the purpose of this provision, the term "storage"
shall mean the placing of vehicles, equipment, supplies, or any other items
outside the leased building and which vehicles, equipment, supplies, or any
other items do not serve an actual day-to-day business function.


                                       26

<PAGE>

<PAGE>


7.06 HOUSEKEEPING:

        If accumulation of weeds, rubbish, or items of equipment or supplies are
permitted to remain on the premises more than ten (10) days after a request in
writing from the LESSOR to have them removed, the LESSOR or authorized agent may
enter upon the demised premises for the purpose of removing same by whatever
means it deems necessary but shall not have any affirmative duty to do so. Such
entry shall not be deemed a trespass and the LESSOR shall not be subject to any
liability. The cost of such work shall be borne by the LESSEE.

7.07 GARBAGE STORAGE AND DISPOSAL:

        LESSEE agrees to store all accumulated garbage in a neat and clean
manner, as an essential element of its responsibilities for neatness of the
premises and agrees to comply with all rules and ordinances of the city and
state regarding its storage and disposal.

7.08 CUMULATIVE RIGHTS AND REMEDIES:

        All rights and remedies of LESSOR and LESSEE enumerated in this lease
shall be in addition to other rights or remedies allowed by law. Likewise, the
exercise or failure to exercise by LESSOR and LESSEE of any remedy provided for
herein or allowed by law shall not preclude its exercise of other remedies.

7.09 INTERPRETATION:

        Words of gender used in this lease shall be held and construed to
include any other gender and words in the singular shall be held to include the
plural and vice versa unless the context otherwise requires.


                                       27

<PAGE>

<PAGE>


7.10    INVALIDITY OR ILLEGALITY OF PROVISIONS:

        The invalidity or illegality of any provisions shall not affect the
remainder of this lease.

7.11    SUCCESSORS AND ASSIGNS:

        All of the terms, provisions, covenants, and conditions of this lease
shall inure to the benefit of and being binding upon LESSOR and LESSEE and their
successors, assigns, legal representatives, heirs, executors, and
administrators.

7.12 NON-EXCLUSIVE USE:

        It is understood that nothing herein contained shall be construed to
grant or authorize the granting of an exclusive right unless specifically
identified herein.

7.13    TRAILERS, ABANDONED VEHICLES EXPRESSLY PROHIBITED:

        Towed vehicles or any motor vehicles not currently licensed and actively
used, are not permitted on the demised premises. Under this provision, vehicles,
RV trailers, travel homes and mobile homes, wrecked or abandoned vehicles must
be removed at LESSEE's expense, and failure to do so shall constitute a breach
of this lease. Provided, however, that LESSEE is specifically authorized to
place and maintain on the leased premises trailers, and/or mobile homes used for
occupancy by pilots or other personnel or employees of LESSEE.

7.14 CAPTIONS:

        Articles and headings are inserted only as a matter of convenience and
for reference and in no way define, limit, or describe or intent of any
provision hereof, nor are they meant to bind the LESSOR or LESSEE to the meaning
of such heading.


                                       28

<PAGE>

<PAGE>


7.15    RIGHT OF FLIGHT:

        LESSOR, for itself, its lessees, consignees, permittees, successors and
assigns, reserves the right of flight for the passage of all types of aircraft
now in existence or hereafter created above the leased premises. LESSOR, its
consignees, lessees, permittees, invitees, licensees, successors and assigns
shall likewise be entitled to cause such noise, smoke, vapor, sound effects, and
other distractions as may be inherent in the operation and flight of such
aircraft.

7.16 GOVERNING LAW/VENUE:

        This agreement shall be construed under and in accordance with the laws
of the State of Louisiana. Venue of any action arising under this agreement
shall lie in Vermilion Parish, Louisiana.


7.17 NOTICES:

        Any notices which are required hereunder, or which either LESSOR or
LESSEE may desire to serve upon the other, shall be in writing and shall be
deemed served when deposited in the United States mail, postage paid, return
receipt requested, addressed to LESSEE as follows:

                             CITY OF ABBEVILLE
                             101 North State Street
                             Abbeville, LA  70510

and to LESSOR:

                             ZAPATA HAYNIE CORPORATION
                             P.O. Box 369
                             Abbeville, LA 70511-0369


                                       29

<PAGE>

<PAGE>


7.18    SUBORDINATION OF LEASE:

        This lease shall be subordinated to the provisions of any existing or
future agreement between LESSOR and the United States, relative to the operation
or maintenance of the airport, the execution of which has been or may be
required as a condition to the expenditure of Federal funds for the development
of the airport.

        It is expressly understood and agreed that this lease is subject to and
subordinate to and controlled by provisions, stipulations, covenants, and
agreements contained in those certain contracts, agreements, resolutions, and
actions of the City of Abbeville, constituting agreements between the city and
the United States of America and its agent including, but not limited to, the
Federal Aviation Administration (FAA) and all regulations now and hereafter
imposed upon the city and that the LESSOR shall not be liable to LESSEE on
account of any of the foregoing matters and all of such contracts, agreements,
resolutions, and regulations are incorporated herein by reference, and if any
provision of this lease is determined to be a variance with same, such provision
is unilaterally reformable at LESSOR's option.

        The parties agree that, as of the date of execution of this contract,
there exists no provisions, stipulations, covenants, or agreements which would
prohibit LESSEE from using the leased premises for the purpose set forth in
Paragraph 1.11 titled "Use and Use Conflict" in this agreement.

7.19 NATIONAL EMERGENCY:

        During the time of war or national emergency, LESSOR shall have the
right to lease the landing area or any part hereof to the United States
Government for military or naval

                                       30

<PAGE>

<PAGE>



use, and if such lease is executed, the provisions of this instrument insofar as
they are inconsistent with the provisions of the lease to the Government, shall
be suspended.

7.20 FAA APPROVAL:

        This agreement is subject to FAA and City Council approval and also
constitutes a public document being subject to public inspection at any time
hereafter.

7.21 AIRPORT HAZARD:

        The LESSEE, and its successors and assigns, will not make or permit any
use of the property which would interfere with landing or taking off of aircraft
at the airport or otherwise constitute an airport hazard. This includes such
items as electrical and electronic interference with communications, electrical
or electronic equipment, creation of smoke or dust, or glaring or misleading
lights.

7.22 NOTICE OF PROPOSED CONSTRUCTION OR ALTERATIONS:

        The LESSEE, and its successors and assigns, will complete an FAA Form
7460-1, Notice of Proposed Construction or Alteration, and receive a favorable
determination from FAA prior to any construction on the property.

7.23 AERIAL APPROACHES:

        LESSOR reserves the right to take any action it considers necessary to
protect the aerial approaches of the airport against obstruction, together with
the right to prevent LESSEE from erecting, or permitting to be erected, any
building or other structure on or adjacent to the airport which, in the opinion
of the LESSOR, would limit the usefulness of the airport or constitute a hazard
to aircraft.


                                       31
<PAGE>

<PAGE>


7.24 IMPROVEMENTS VESTED IN LESSOR:

        The parties agree that the obligation and promises of LESSEE, as
expressed herein, to make improvements and maintain building is a part of the
total consideration for this lease agreement. Therefore, all right, title, and
interest in and to said improvements shall at all times herein be vested in
LESSOR, subject only to the right of LESSEE to the use and possession of said
building and improvements during this lease plus any extensions hereof, as
provided in said lease, so long as LESSEE is not in default of any of the terms
of this lease agreement. It shall be the obligation of LESSEE to maintain and
repair the said building and improvements during the term of this lease or any
extension thereof. Upon termination, interest in and to the said improvements
shall remain vested in LESSOR, and LESSEE shall not have any further rights
therein nor be entitled to any reimbursement by reason of LESSEE's maintenance,
improvements, repair, or use of said building.

7.25 CANCELLATION OF PRIOR LEASE AGREEMENT:

        The parties agree that this document is the current lease agreement
between them and that no other past document contains or reflects any agreement
with regard to the leased premises between the parties. The parties hereto
expressly cancel any pre-existing lease agreements between the City of Abbeville
and Zapata Haynie Corporation whether direct agreements between them or
agreements obtained through assignment, sale, or sublease.


                                       32

<PAGE>

<PAGE>

        THUS DONE AND PASSED in Abbeville, Vermilion Parish, Louisiana, in the
Presence of Norman Broussard and Suzanne Zaunbrecher, good and competent
witnesses who have signed these presents with the appearer and me, Notary, on
this 4th day of January, 1994.

WITNESSES:                                  CITY OF ABBEVILLE

___________________                         By: ____________________________
Norman Broussard                                   R. Brady Broussard, Mayor

___________________
Susan Zaunbrecher

                             _____________________________
                                    Notary Public


                                       33

<PAGE>

<PAGE>


        THUS DONE AND PASSED in Abbeville, Vermilion Parish, Louisiana, in the
presence of Peggy Trahan and Martha Kuehling, good and competent witnesses who
have signed these presents with the appearer and me, Notary, on this 19th day of
January, 1994.

WITNESSES:                                  ZAPATA HAYNIE CORPORATION

___________________                         By: ____________________________
Peggy Trahan                                       Vernon D. Niven

___________________
Martha Kuehling

                             _____________________________
                                    Notary Public


                                       34





<PAGE>





<PAGE>

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT ("Agreement"), dated August 29, 1997, is made
between ZAPATA PROTEIN (USA), INC., a Virginia corporation (the "Borrower"),
ZAPATA PROTEIN, INC., a Delaware corporation (the "Guarantor") and HIBERNIA
NATIONAL BANK ("Lender"), who agree as follows:

                                   ARTICLE 1.
                                  GENERAL TERMS

         SECTION 1.1 TERMS DEFINED ABOVE. As used in this Agreement, the terms
"Agreement," "Borrower," "Guarantor" and "Lender" shall have the meanings
indicated above.

         SECTION 1.2 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings indicated, unless the context otherwise
requires:

                  "Business Day" shall mean a day other than a Saturday, Sunday
or legal holiday for commercial banks in New Orleans, Louisiana.

                  "Closing Date" shall mean the date on which the Note is
executed and delivered by the Borrower to the Lender.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  "Collateral" shall mean the properties described in the
Collateral Documents as security for the Indebtedness.

                  "Collateral Documents" shall mean collectively the documents
required by the Lender to obtain the security interest in the Collateral as
described in Article 3 hereof.

                  "Debt" shall mean any and all amounts and/or liabilities owing
from time to time by the Borrower to any Person, including the Lender, direct or
indirect, liquidated or contingent, now existing or hereafter arising,
including, without limitation, (i) indebtedness for borrowed money; (ii)
unfunded portions of commitments for money to be borrowed; (iii) the amounts of
all standby and commercial letters of credit and bankers acceptances, matured or
unmatured, issued on behalf of the Borrower; (iv) guaranties of the obligations
of any other Person, whether direct or indirect, whether by agreement to
purchase the indebtedness of any other Person or by agreement for the furnishing
of funds to any other Person through the purchase or lease of goods, supplies or
services (or by way of stock purchase, capital contribution, advance or loan)
for the purpose of paying or discharging the indebtedness of any other Person,
or otherwise; (v) the present value of all obligations for





<PAGE>


<PAGE>



the payment of rent or hire of property of any kind (real or personal) under
leases or lease agreements required to be capitalized under generally accepted
accounting principles; and (vi) trade payables and operating leases incurred in
the ordinary course of business or otherwise.

                  "Default" shall mean the occurrence of any of the events
specified in Article 8 hereof, whether or not any requirement for notice or
lapse of time or other condition precedent has been satisfied.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                  "Event of Default" shall mean the occurrence of any of the
events specified in Article 8 hereof, provided that any requirement for notice
or lapse of time or any other condition precedent has been satisfied.

                  "Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on jurisprudence, statute or contract,
and including, but not limited to, the lien or security interest arising from a
mortgage, encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements,
servitudes, unsufructs, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting property. For the
purposes of this Agreement, the Borrower shall be deemed to be the owner of any
property which it has accrued or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.

                  "Loan" shall mean the term loan to be made by the Lender to
the Borrower as specified in Section 2.1 hereof.

                  "Note" shall mean the term note of the Borrower evidencing the
Loan as specified in Section 2.1 hereof, including any amendments,
modifications, supplements, restatements, refinancings, substitutions or
renewals thereto or thereof.

                  "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof, or any other form of entity.

                  "Plan" shall mean any plan subject to Title IV of ERISA and
maintained by the Borrower, or any such plan to which the Borrower is required
to contribute on behalf of its employees.


                                      - 2 -




<PAGE>


<PAGE>



                  "Prohibited Transaction" shall mean any transaction set forth
in Section 406 of ERISA or Section 4979 of the Code.

                  "Reportable Event" shall have the meaning set forth in Title
IV of ERISA.

                  "Termination Event" shall mean (i) Reportable Event described
in Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30 day notice to the Pension
Benefit Guaranty Corporation under such regulations) or (ii) the withdrawal of
the Borrower from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or (iii) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA or (iv) the institution of proceedings
to terminate a Plan by the Pension Benefit Guaranty Corporation under Section
4042 of ERISA, and, in each case in clauses (i) through (iv) above, such event
or condition, together with all other events or conditions, is likely to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.

         SECTION 1.3 ACCOUNTING TERMS. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made and all financial statements required to be delivered
hereunder shall be prepared in accordance with generally accepted accounting
principles as in effect from time to time, on a basis consistent (except for
changes approved by independent public accountants for the Borrower) with the
most recent audited financial statements of the Borrower.

                                   ARTICLE 2.
                                   THE CREDIT

         SECTION 2.1 COMMITMENT TO LEND. Subject to and upon the terms and
conditions contained in this Agreement, and relying on the representations and
warranties contained in this Agreement, the Lender agrees to make a term loan to
the Borrower in the principal amount of $2,212,250. The Loan is represented by a
promissory note in the principal amount of $2,212,500 payable to the order of
the Lender. Interest on the Loan shall be payable monthly in arrears on the
first day of each month, beginning October 1, 1997 (except that interest on the
Loan at LIBO Rates having either two month or three month interest periods shall
be payable on the last day of such interest periods). Principal on the Loan
shall be payable in monthly installments of $36,870.83 on the first day of each
month, beginning October 1, 1997. The balance of all outstanding principal and
accrued but unpaid interest shall be due and payable in full at maturity on
August 29, 2002. Unless otherwise agreed or required by applicable law, payments
will be applied first to accrued unpaid interest in arrears, then to principal,
and any remaining amount to pay unpaid collection costs and late charges.

         SECTION 2.2 INTEREST RATES. The Loan shall bear interest at either (i)
the Prime Rate or (ii) the LIBO Rate plus 1.75%, at the Borrower's option. For
the purposes hereof, "Prime


                                      - 3 -




<PAGE>


<PAGE>



Rate" shall mean the Citibank, N.A. prime or base rate; and "LIBO Rate" shall
mean the rate at which deposits of United States Dollars are offered in the
London inter-bank market (as shown on the Dow Jones Telerate Matrix for British
Bankers Association Interest Settlement Rates as of the date of determination)
for interest periods of one month, two months or three months (at Borrower's
option), in amounts equal (as nearly as may be) to the principal amount of the
Loan outstanding. All advances under the Loan shall bear interest at the same
interest rate; only one interest rate tranche shall be permitted for the Loan.
In the absence of any designation by the Borrower, the Loan shall bear interest
at the Prime Rate.

         SECTION 2.3 PREPAYMENTS. The Borrower may, at its option, prepay the
principal amount of the Loan at any time, in whole or in part, upon 30 days
prior written notice. All partial prepayments shall be applied to installments
of principal in inverse order of their maturity.

         SECTION 2.4 BUSINESS DAYS. If the date for any payment, prepayment or
commitment fee payment hereunder falls on a day which is not a Business Day,
then for all purposes of this Agreement, the same shall be deemed to have fallen
on the next following Business Day, and such extension of time shall in such
case be included in the computation of payments of interest or commitment fee,
as the case may be. If the date for any interest rate election falls on a day
which is not a Business Day, then the same shall be deemed to have fallen on the
next preceding Business Day.

         SECTION 2.5 NATURE OF COMMITMENT. The Lender's obligation to make any
and all advances on the Loan shall be deemed to be a transaction made pursuant
to a contract to make a loan or extend debt financing or financial
accommodations to the Borrower within the meaning of Sections 365(c)(2) and
365(e)(2)(B) of the Bankruptcy Code of the United States.

         SECTION 2.6 PAYMENTS. The Borrower shall make each payment hereunder
and under the Note not later than 3:00 p.m. (central time) on the day when due
in lawful money of the United States of America to the Lender at its office at
313 Carondelet Street, New Orleans, Louisiana 70130 or P.O. Box 61540, New
Orleans, Louisiana 70161 in same day funds. The Borrower hereby authorizes the
Lender to charge from time to time against the Borrower's accounts with the
Lender any amount so due.

         SECTION 2.7 USE OF PROCEEDS. The Borrower shall use the proceeds of the
Loan to finance equipment and aircraft and to provide for working capital.

                                   ARTICLE 3.
                          SECURITY FOR THE OBLIGATIONS

         SECTION 3.1 SECURITY.  The Loan shall be secured by the following:


                                      - 4 -




<PAGE>


<PAGE>



                  (a) Security Agreement granting to the Lender a first priority
security interest in certain aircraft of the Borrower.

                  (b) Security Agreement granting to the Lender a first priority
security interest in certain equipment of the Borrower.

                  (c) Guaranty Agreement by the Guarantor.

                                   ARTICLE 4.
                         REPRESENTATIONS AND WARRANTIES

         In order to induce the Lender to enter into this Agreement, the
Borrower and Guarantor represent and warrant to the Lender (which
representations and warranties will survive the extensions of credit under this
Agreement) that:

         SECTION 4.1 EXISTENCE. (a) The Borrower is a corporation duly
organized, legally existing and in good standing under the laws of the State of
Virginia, and is duly qualified as a foreign corporation in all jurisdictions
where the property it owns or the business it transacts make such qualification
necessary. The Borrower is a wholly-owned subsidiary of the Guarantor. The chief
executive office of the Borrower is at 3840 Highway 22, Mandeville, Louisiana
70471. The federal taxpayer identification number for the Borrower is
54-0353060.

                  (b) The Guarantor is a corporation duly organized, legally
existing and in good standing under the laws of ____________, and is duly
qualified as a foreign corporation in all jurisdictions where the property it
owns or the business it transacts make such qualification necessary. The
Guarantor is a holding company that is a wholly-owned subsidiary of Zapata
Corporation.

         SECTION 4.2 POWER AND AUTHORIZATION. The Borrower is duly authorized
and empowered to execute, deliver and perform this Agreement, the Note and the
Collateral Documents executed by it. All action on the part of the Borrower
requisite for the due creation and execution of this Agreement, the Note and
Collateral Documents has been duly and effectively taken. The Guarantor is duly
authorized and empowered to execute, deliver and perform the Collateral
Documents executed by it. All action on the part of the Guarantor requisite for
the due creation and execution of the Collateral Documents executed by it has
been duly and effectively taken.

         SECTION 4.3 BINDING OBLIGATIONS. The Borrower and Guarantor have
reviewed this Agreement, the Note and the Collateral Documents with counsel for
the Borrower and have had the opportunity to discuss the provisions thereof with
the Lender prior to execution. This Agreement, the Note and the Collateral
Documents constitute valid and binding obligations of the Borrower and Guarantor
enforceable in accordance with their terms


                                      - 5 -




<PAGE>


<PAGE>



(except that enforcement may be subject to any applicable bankruptcy, insolvency
or similar laws generally affecting the enforcement of creditors' rights).

         SECTION 4.4 NO LEGAL BAR OR RESULTANT LIEN. This Agreement, the Note
and the Collateral Documents do not and will not violate any provisions of the
Borrower's or Guarantor's charter and by-laws, will not violate any contract,
agreement, law, regulation, order, injunction, judgment, decree or writ to which
the Borrower or Guarantor is subject, and will not result in the creation or
imposition of any Lien upon any property of the Borrower or Guarantor, other
than as contemplated by this Agreement.

         SECTION 4.5 NO CONSENT. The Borrower's and Guarantor's execution,
delivery and performance of this Agreement, the Note and the Collateral
Documents executed by them do not require the consent or approval of any other
Person, including, without limitation, any regulatory authority or governmental
body of the United States or any state thereof or any political subdivision of
the United States or any state thereof.

         SECTION 4.6 FINANCIAL CONDITION. All financial statements of the
Guarantor delivered to Lender fairly and accurately present the financial
condition of the parties for whom such statements are submitted, and all such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved, and
there are no contingent liabilities required by generally accepted accounting
principles to be disclosed in the balance sheets of such parties not disclosed
thereby (or not otherwise disclosed to the Lender) which would materially
adversely affect the financial condition of such parties. Since the close of the
period covered by the latest financial statements delivered to Lender with
respect to the Guarantor, there has been no material adverse change in the
assets, liabilities or financial condition of the Guarantor. No event has
occurred (including, without limitation, any litigation or administrative
proceedings) and no condition exists or, to the knowledge of the Borrower or
Guarantor is threatened, which (i) might render the Borrower or Guarantor unable
to perform its obligations under this Agreement, the Note or the Collateral
Documents or (ii) would constitute a Default hereunder or (iii) might adversely
affect the financial condition of the Borrower or the Guarantor or the validity
or priority of the lien of the Collateral Documents or (iv) might adversely
affect the business or the property of the Borrower or Guarantor or their
ability to carry on business as now conducted. The Borrower and the Guarantor
are (i) not a defendant in any suits or legal action which are not covered by
insurance or disclosed to the Lender and (ii) do not have any judgments,
garnishments or attachments pending against them. All of the materials which the
Borrower has submitted to the Lender a constitute a complete and accurate
presentation of all facts material to the Lender's agreement to execute this
Agreement.

         SECTION 4.7 SOLVENCY. The Borrower and Guarantor will receive a
reasonably equivalent value in exchange for the obligations of the Borrower
under this Agreement, the Note and the Collateral Documents. The execution and
performance of this Agreement, the Note and the Collateral Documents by the
Borrower and Guarantor (i) are not being made


                                      - 6 -




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with any intent to hinder, delay or defraud any entity to which the Borrower or
Guarantor is indebted; (ii) will not result in the Borrower or Guarantor
becoming insolvent or having an unreasonably small capital for the business in
which it is engaged; and (iii) will not cause the Borrower or Guarantor to incur
debts that would be beyond the ability of the Borrower and Guarantor to pay as
such debts mature. For the purposes of this Section, "insolvent" shall mean the
following: the sum of the Borrower's and Guarantor's debts, respectively, is
greater than all of the Borrower's and Guarantor's property at a fair valuation.
Any property transferred, concealed or removed with intent to hinder, delay or
defraud the Borrower's or Guarantor's creditors and property which may be
exempted from the debtor's estate under the Federal Bankruptcy Code shall be
excluded from the assets of the Borrower for purposes of determining insolvency.
The Borrower and Guarantor have never been adjudicated a bankrupt or filed a
case under the Federal Bankruptcy Code or had an order for relief entered
against them under the Federal Bankruptcy Code.

         SECTION 4.8 TAXES AND GOVERNMENTAL CHARGES. The Borrower and Guarantor
have filed all tax returns and reports required to be filed and has paid all
taxes, assessments, fees and other governmental charges levied upon them or upon
their property or income which are due and payable, including interest and
penalties, or has provided adequate reserves for the payment thereof.

         SECTION 4.9 DEFAULTS. The Borrower and Guarantor are not in default
under any indenture, mortgage, deed of trust, agreement or other instrument to
which the Borrower or Guarantor is a party or by which they are bound.

         SECTION 4.10 CASUALTIES AND CONDEMNATION. Since the date of the most
recent financial statements furnished to the Lender prior to the Closing Date,
neither the business nor the property of the Borrower or Guarantor has been
materially and adversely affected as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of property or cancellation of
contracts, permits or concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces or acts of God or of any public
enemy, except as disclosed in writing to the Lender on or prior to the Closing
Date.

         SECTION 4.11 USE OF PROCEEDS; MARGIN STOCK. The proceeds of the Loan
hereunder will be used by the Borrower for the purposes listed in Article 2
hereof. None of such proceeds will be used for the purpose of, and the Borrower
is not engaged in the business of extending credit for the purpose of,
purchasing or carrying any "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System (12 C.F.R. Part 221), or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of said
Regulation U. The Borrower is not engaged principally, or as one of the
Borrower's important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stocks. Neither the Borrower nor any
Person acting on behalf of the Borrower has taken or will take any action


                                      - 7 -




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which might cause this Agreement to violate Regulation U or any other regulation
of the Board of Governors of the Federal Reserve System or to violate the
Securities Exchange Act of 1934 or any rule or regulation thereunder, in each
case as now in effect or as the same may hereinafter be in effect.

         SECTION 4.12 COMPLIANCE WITH THE LAW. The Borrower and Guarantor (a)
are not in violation of any law, judgement, decree, order, ordinance or
governmental rule or regulation to which the Borrower or any of its property is
subject; and (b) have not failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of any of its
property or the conduct of its business; in each case, which violation or
failure could reasonably be anticipated to materially and adversely affect the
business, prospects, profits, property or condition (financial or otherwise) of
the Borrower or Guarantor.

         SECTION 4.13 ERISA. The Borrower and Guarantor are in compliance in all
material respects with the applicable provisions of ERISA, and no Reportable
Event has occurred with respect to any Plan of the Borrower or Guarantor. This
provision shall be applicable only if Borrower and Guarantor have adopted or
shall adopt a defined benefit Plan.

         SECTION 4.14 OTHER INFORMATION. All information, reports, papers and
data given to the Lender by the Borrower and Guarantor pursuant to this
Agreement and in connection with the Borrower's application for the Loan are
accurate and correct in all material respects. All financial projections given
to the Lender were prepared in good faith based on facts and circumstances
existing at the time of preparation and were believed by the Borrower and
Guarantor to be accurate in all material respects. No information, exhibit or
report furnished by the Borrower and Guarantor to the Lender in connection with
this Agreement or in the negotiation of this Agreement contained any material
misstatement or fact or omitted to state a material fact necessary to make the
statement contained therein not misleading.

         SECTION 4.15 UTILITY OR INVESTMENT COMPANY. The Borrower is not engaged
in the State of Louisiana in the generation, transmission or distribution and
sale of electric power, transportation, distribution and sale through a local
distribution system of natural or other gas for domestic, commercial, industrial
or other use; ownership or operation of a pipeline for the transmission or sale
of natural or other gas, crude oil or petroleum products to other pipeline
companies, refineries, local distribution systems, municipalities or industrial
consumers; provision of telephone or telegraph service to others; production,
transmission or distribution and sale of steam or water; operation of a
railroad; or provision of sewer service to others. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

         SECTION 4.16 TITLE TO COLLATERAL. The Borrower has good and
merchantable title to the Collateral, free of all liens and encumbrances except
those created in favor of the Lender. Furthermore, the Borrower has not
heretofore conveyed or agreed to convey or


                                      - 8 -




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encumber any Collateral in any way, except in favor of the Lender or as
permitted by this Agreement.

         SECTION 4.17 CONTINUING ACCURACY. All of the representations and
warranties contained in this Article or elsewhere in this Agreement shall be
true through and until the later of the date on which all obligations of the
Borrower under this Agreement, the Note and the Collateral Documents and any
other documents executed in connection therewith are fully satisfied or the
Borrower shall promptly notify the Lender of any event which would render any of
said representations and warranties untrue or misleading.

                                   ARTICLE 5.
                              AFFIRMATIVE COVENANTS

         Unless the Lender's prior written consent to the contrary is obtained,
the Borrower and Guarantor will at all times comply with the covenants in this
Article 5, from the date hereof and for so long as any part of the Obligations
is outstanding.

         SECTION 5.1 PERFORMANCE OF OBLIGATIONS. The Borrower will repay the
Loan according to the reading, tenor and effect of the Note and this Agreement.
The Borrower and Guarantor will do and perform every act required of it by this
Agreement, the Note, or the Collateral Documents at the time or times and in the
manner specified.

         SECTION 5.2 FINANCIAL STATEMENTS AND REPORTS. The Borrower and
Guarantor will promptly furnish to the Lender such information regarding the
business and affairs and financial condition of the Borrower and Guarantor as
the Lender may reasonably request, and, specifically, the Borrower and Guarantor
will furnish or cause to be furnished to the Lender:

                  (a) Annual Financial Statements of the Guarantor - as soon as
available and, in any event, within 120 days after the close of each fiscal year
of the Guarantor, the audited balance sheet of the Guarantor as at the end of
such year, the audited statement of income of the Guarantor for such year and
the audited statement of cash flow of the Guarantor for such year, in each case
on a consolidated and consolidating basis and setting forth in comparative form
the corresponding figures for the preceding fiscal year certified correct by an
independent certified public accounting firm acceptable to the Lender.

                  (b) Monthly Financial Statements of the Guarantor - as soon as
available but in any event within 30 days after the end of each month, the
unaudited financial statements of the Guarantor for such month, certified
correct by the chief financial officer of the Guarantor.

                  (c) Quarterly Compliance Certificates - within 30 days after
the end of each fiscal quarter of the Borrower and Guarantor, the Borrower and
Guarantor will provide the Lender with a certificate signed by the chief
financial officers of the Borrower and


                                      - 9 -




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<PAGE>



Guarantor, in form and substance satisfactory to the Lender, to the effect that
no Defaults exist (or if a Default exists the nature, period of existence and
status thereof) and showing a calculation of the financial covenants set forth
in this Agreement.

                  (d) Other Information - promptly upon the request of the
Lender, all regular budgets and such other information regarding the business
and affairs and financial condition of the Borrower and Guarantor as the Lender
may reasonably request.

All such financial statements and reports referred to above shall be in such
detail as the Lender may reasonably request and shall conform to generally
accepted accounting principles applied on a consistent basis, except only for
such changes in accounting principles or practice with which the independent
certified public accountants concur.

         SECTION 5.3 TAXES AND OTHER LIENS. The Borrower and Guarantor will file
all tax returns required by law before the due date thereof (as validly
extended) and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon them or upon their income or upon
any of their property as well as all claims of any kind (including claims for
labor, materials, supplies and rent) which, if unpaid, might become a Lien upon
any of the Collateral; provided, however, the Borrower and Guarantor shall not
be required to pay any such tax, assessment, charge, levy or claim if the
amount, applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings diligently conducted and if the contesting
party shall have set up reserves therefor adequate under generally accepted
accounting principles.

         SECTION 5.4 MAINTENANCE OF EXISTENCE. The Borrower and Guarantor will
(i) maintain their existence; (ii) observe and comply (to the extent necessary
so that any failure will not materially and adversely affect the business of the
Borrower or Guarantor) with all valid laws, statutes, codes, acts, ordinances,
orders, judgements, decrees, injunctions, rules, regulations, certificates,
franchises, permits, licenses, authorizations, directions and requirements
(including, without limitation, applicable statutes, regulations, orders and
restrictions relating to environmental standards or controls or to energy
regulations) of all federal, state, county, municipal and other governments,
departments, commissions, boards, courts, authorities, officials and officers,
domestic or foreign; (iii) maintain their properties (and any property leased by
or consigned to it or held under title retention or conditional sales contracts)
in generally good and workable condition at all times and make all repairs,
replacements, additions, betterments and improvements to its properties to the
extent necessary so that any failure will not materially and adversely affect
the business of the Borrower and Guarantor; (iv) maintain or obtain all
franchises, permits, licenses, authorizations, directions of all federal, state,
county, municipal and other governments, departments, commissions, boards,
courts, authorities, officials and officers, domestic or foreign necessary to
allow the Borrower and Guarantor to maintain its business as currently
conducted; and (v) continue to conduct its business in the manner currently
conducted. The Borrower shall remain a wholly-owned subsidiary of the Guarantor.


                                     - 10 -




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<PAGE>



         SECTION 5.5 FURTHER ASSURANCES. The Borrower and Guarantor will
promptly (and in no event later than 30 days after written notice from the
Lender is received) cure any defects in the creation, execution and delivery of
this Agreement, the Note or the Collateral Documents. The Borrower and Guarantor
at their expense will promptly execute and deliver to the Lender upon request
all such other and further documents, agreements and instruments in compliance
with or accomplishment of the covenants and agreements of the Borrower and
Guarantor in this Agreement, the Note or the Collateral Documents or to further
evidence and more fully describe the Collateral, or to correct any omissions in
the Collateral Documents, or more fully state the security obligations set out
herein or in any of the Collateral Documents, or to perfect, protect or preserve
any Liens created pursuant to any of the Collateral Documents, or to make any
recordings, to file any notices, or obtain any consents, as may be necessary or
appropriate in connection with the transactions contemplated by this Agreement.

         SECTION 5.6 REIMBURSEMENT OF EXPENSES. The Borrower and Guarantor will
pay all reasonable legal fees and fees of Lender's counsel, title insurance
premiums, brokerage fees, appraisal fees, environmental survey fees, inspection
fees, survey costs, travel and other expenses incurred by the Lender in
connection with the preparation of this Agreement, the Note and the Collateral
Documents (including any amendments) and the maintenance of the Loan. The
Borrower and Guarantor will, upon request, promptly reimburse the Lender for all
payments expended, advanced or incurred by the Lender to satisfy any obligation
of the Borrower and Guarantor under this Agreement, or to protect the property
or business of the Borrower and Guarantor or to collect the Obligations, or to
enforce the rights of the Lender under this Agreement, the Note and/or the
Collateral Documents, which amounts will include all court costs, attorneys'
fees, fees of auditors and accountants, and investigation expenses reasonably
incurred by the Lender in connection with any such matters, together with
interest at the interest rate set forth in the Note on each such amount from the
date that the same is expended, advanced or incurred by the Lender until the
date of reimbursement to the Lender.

         SECTION 5.7 INSURANCE. (a) The Borrower shall procure and maintain for
the benefit of the Lender original paid up insurance policies from companies
licensed in the state where the Collateral is located and having a Best's rating
of A/IX, in amounts, in form and substance, and with expiration dates acceptable
to the Lender and containing a non-contributory standard mortgagee clause or its
equivalent in a form satisfactory to the Lender, or the statutory mortgagee
clause, if any, required in the state where the Collateral is located, or a
mortgagee's loss payable endorsement, in favor of the Lender, providing the
following types of insurance on the Collateral:

                           (i) Multi-Peril Hazard Insurance. Multi-peril hazard
         insurance, in each case affording insurance against loss or damage by
         fire, lightning, explosion, collapse, theft, sprinkler leakage,
         vandalism and malicious mischief and such other perils as are included
         in so-called "all-risks" or "extended coverage" and against such other
         insurance perils, as, under good insurance practices, from time to time
         are


                                     - 11 -




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<PAGE>



         insured against for properties of similar character and location; such
         insurance to be not less than the lesser of (i) 100% of the full
         replacement cost of the Collateral without deduction for depreciation
         or (ii) the principal amount of the Loan.

                           (ii) Comprehensive General Liability Insurance.
         Comprehensive public liability insurance with respect to the Collateral
         and the operations related thereto, whether conducted on or off the
         Collateral, against liability for personal injury (including bodily
         injury and death) and property damage, of not less than $5,000,000
         combined single limit bodily injury and property damage; such
         comprehensive public liability insurance to be on a per occurrence
         basis and, if required by the Lender, to specifically include, but not
         be limited to, water damage liability, products liability, aircraft and
         motor vehicle liability for all owned and non-owned aircraft and
         vehicles, including rented and leased vehicles, and contractual
         indemnification.

                           (iii) Other Insurance. Such other insurance to the
         Borrower in such amounts as may from time to time be reasonably
         required by Lender against other insurable casualties which at the time
         are commonly insured against in the case of companies similarly
         situated.

                  (b) All of the foregoing policies shall contain an agreement
by the insurer not to cancel or amend the policies without giving the Lender at
least 30 days prior written notice of its intention to do so.

                  (c) Borrower shall deliver a copy of a certified renewal
binder or evidence of new coverage in the form of a binding certificate(s) of
insurance reasonably acceptable to Lender prior to expiration of the existing
policy. Borrower shall have 60 days thereafter to deliver the original policy to
the Lender. In the event Borrower should, for any reason whatsoever, fail to
keep the Collateral or any part thereof so insured, or to keep said policies so
payable, or fail to deliver to Lender the original, in its sole discretion, may
itself have such insurance effected in such amounts and in such companies as it
may deem proper and may pay the premiums therefor. The Borrower shall reimburse
the Lender upon demand for the amount of premium paid, together with interest
thereon at 12% per annum from date until paid.

                  (d) Borrower agrees to notify Lender immediately in writing of
any material fire or other casualty to or accident involving the Collateral,
whether or not such fire, casualty or accident is covered by insurance. Borrower
further agrees to notify promptly Borrower's insurance company and to submit an
appropriate claim and proof of claim to the insurance company if the Collateral
is damaged or destroyed by fire or other casualty.

                  (e) The Lender is hereby authorized and empowered, at its
option, to collect and receive the proceeds from any policy or policies of
insurance, and each insurance company is hereby authorized and directed to make
payment of all such losses


                                     - 12 -




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<PAGE>



to the Borrower and the Lender jointly. The Lender shall apply the net proceeds
thereof, at Lender's sole option, either to the repayment or prepayment of the
Loan or to permit the Borrower to repair or replace the damaged or destroyed
Collateral.

         SECTION 5.8 ACCOUNTS AND RECORDS. The Borrower and Guarantor will keep
books of record and accounts in which true and correct entries will be made as
to all material matters of all dealings or transactions in relation to its
business and activities, in accordance with generally accepted accounting
principles consistently applied, except for changes in accounting principles or
practices with which the independent public accountants for the Borrower and
Guarantor concur.

         SECTION 5.9 RIGHT OF INSPECTION. The Borrower and Guarantor will permit
any officer, employee or agent of the Lender to examine the books of record and
accounts of the Borrower and Guarantor, take copies and extracts therefrom, and
discuss the affairs, finances and accounts of the Borrower and Guarantor with
the Borrower and Guarantor's officers, accountants and auditors, all at such
reasonable times and on reasonable notice and as often as the Lender may
reasonably desire.

         SECTION 5.10 NOTICE OF CERTAIN EVENTS. (a) The Borrower and Guarantor
shall promptly notify the Lender if the Borrower and Guarantor learns of the
occurrence of any event which constitutes a Default under this Agreement,
together with a detailed statement by a responsible officer of the Borrower and
Guarantor of the steps being taken to cure the effect of such Default.

                  (b) The Borrower and Guarantor shall promptly notify the
Lender of any change in location of the Borrower's and Guarantor's principal
place of business or the office where it keeps its records concerning accounts
and contract rights.

                  (c) The Borrower and Guarantor shall promptly notify the
Lender of the arising of any litigation or dispute threatened against or
affecting the Borrower and Guarantor which, if adversely determined, would have
a material adverse effect upon the financial condition or business of the
Borrower and Guarantor. In the event of such litigation involving the Borrower
and Guarantor, the Borrower and Guarantor will cause such proceedings to be
vigorously contested in good faith and, in the event of any adverse ruling or
decision, the Borrower and Guarantor shall prosecute all allowable appeals. The
Lender may (but shall not be obligated to), without prior notice to the Borrower
and Guarantor, commence, appear in, or defend any action or proceeding
purporting to affect the Loan, or the respective rights and obligations of the
Lender and the Borrower and Guarantor pursuant to this Agreement. The Lender may
(but shall not be obligated to) pay all necessary expenses, including reasonable
attorneys' fees and expenses incurred in connection with such proceedings or
actions, which the Borrower and Guarantor agrees to repay to Lender upon demand.


                                     - 13 -




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         SECTION 5.11 ERISA INFORMATION AND COMPLIANCE. The Borrower and
Guarantor will promptly furnish to the Lender (i) upon request of the Lender
promptly after the filing thereof with the United States Secretary of Labor or
the Pension Benefit Guaranty Corporation, copies of each annual and other report
with respect to each Plan or any trust created by the Borrower and Guarantor and
(ii) immediately upon becoming aware of the occurrence of any Reportable Event,
or of any Prohibited Transaction in connection with any Plan or any trust
created by the Borrower or Guarantor, a written notice signed by the president
or the chief financial officer of the Borrower or Guarantor specifying the
nature thereof, what action the Borrower or Guarantor is taking or proposes to
take with respect thereto, and, when known, any action taken by the Internal
Revenue Service with respect thereto. The Borrower and Guarantor will comply
with all of the applicable funding and other requirements of ERISA as such
requirements relate to the Plans of the Borrower and Guarantor. This provision
shall be applicable only if Borrower and Guarantor has adopted or shall adopt a
defined benefit Plan.

         SECTION 5.12 INDEMNIFICATION. (a) The Borrower and Guarantor will
indemnify the Lender and hold the Lender harmless from claims of brokers with
whom the Borrower and Guarantor has dealt in the execution hereof or the
consummation of the transactions contemplated hereby. The Lender will indemnify
the Borrower and Guarantor from claims of brokers with whom the Lender has
contracted in connection with the transactions contemplated hereby.

                  (b) The Borrower and Guarantor will indemnify the Lender and
hold the Lender harmless from any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs and expenses of whatever kind
or nature which may be imposed on, incurred by or asserted at any time against
the Lender in any way relating to, or arising in connection with, the use or
occupancy of any of the Collateral.

                  (c) The Borrower and Guarantor will indemnify and fully
protect the Lender from any allegation or charge whatsoever of negligence,
misfeasance or nonfeasance of the Lender in whole or in part, pertaining to any
defect in the Collateral, and particularly any failure of the Lender or any
agent, officer, employee or representative of the Lender to note any defect in
materials or workmanship or of physical conditions or failure to comply with any
plans, specifications, drawings, ordinances, statutes or other governmental
requirements, or to call to the attention of any person whatsoever, or take any
action, or to demand that any action be taken, with regard to any such defect or
failure or lack of compliance.

         SECTION 5.13 COMPLIANCE WITH LAWS AND COVENANTS. The Borrower and
Guarantor shall observe and comply with all laws, statutes, codes, acts,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations, directions and
requirements of all federal, state, county, municipal and other governments,
departments, commissions, boards, courts, authorities, officials and officers,
domestic or foreign, applicable to the Borrower and Guarantor or the Vehicles.


                                     - 14 -




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         SECTION 5.14 ENVIRONMENTAL INDEMNITY. (a) The Borrower and Guarantor
shall defend, indemnify and hold the Lender and its directors, officers, agents
and employees harmless from and against all claims, demands, causes of action,
liabilities, losses, costs and expenses (including, without limitation, costs of
suit, reasonable attorneys' fees and fees of expert witnesses) arising from or
in connection with (i) the presence on or under the property of the Borrower or
Guarantor of any hazardous substances or solid wastes (as defined elsewhere in
this Agreement) or any releases or discharges of any hazardous substances or
solid wastes on, under or from the property of the Borrower or Guarantor or (ii)
any activity carried on or undertaken on or off the property of the Borrower or
Guarantor, whether prior to or during the term of this Agreement, and whether by
the Borrower and Guarantor or any predecessor in title or any officers,
employees, agents, contractors or subcontractors of the Borrower and Guarantor
or any predecessor in title, or any third persons at any time occupying or
present on the property of the Borrower or Guarantor in connection with the
handling, use, generation, manufacture, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any hazardous substances or
solid wastes at any time located or present on or under the property of the
Borrower or Guarantor. Without prejudice to the survival of any other agreements
of the Borrower and Guarantor hereunder, the provisions of this Section shall
survive the final payment of all Obligations and the termination of this
Agreement and shall continue thereafter in full force and effect.

                  (b) The Borrower and Guarantor shall observe and comply with
all laws, ordinances, orders, decrees, rules and regulations of all federal and
state governments relating to environmental matters.

         SECTION 5.15 FINANCIAL COVENANTS. (a) Total Liabilities to Tangible Net
Worth Ratio. The Guarantor shall maintain on a consolidated basis as of the end
of each month, a ratio of (i) Debt (including the Loan) to (ii) tangible net
worth (defined as total assets less total liabilities and less items commonly
referred to an intangible items) of not more than 1.00 to 1.00.

                  (b) Minimum EBIT to Interest Expense Ratio. The Guarantor
shall maintain on a consolidated basis during each 12 month period ending on the
last day of each fiscal quarter of the Guarantor, a ratio of (i) net income
before interest expense and income taxes to (ii) total interest expense on the
Loan and on any other Debt, of not less than 3.00 to 1.00.

                  (c) Maximum Dividends and Other Distributions. The Guarantor
and Borrower shall not pay any dividends, redeem any stock, make any loans or
lease payments to affiliates or make any other distributions or payments to
affiliates (collectively, the "Restricted Payments"), if (i) a Default exists or
is continuing or would be caused by the Restricted Payments, or (ii) if the
total cash or cash equivalents of the Borrower and Guarantor are less than
$3,000,000 or would be less than $3,000,000 if any such Restricted Payment were
made. For the purposes hereof, "affiliate" shall mean the Borrower, the


                                     - 15 -




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Guarantor, Zapata Corporation or any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with the Borrower,
Guarantor or Zapata Corporation; a Person shall be deemed "controlled by"
another person if the other Person possesses, directly or indirectly, power
either to vote 10% or more of the securities having ordinary voting power for
the election of directors of such Person, or direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise.

                                   ARTICLE 6.
                               NEGATIVE COVENANTS

         Unless the Lender's prior written consent to the contrary is obtained,
the Borrower and Guarantor will at all times comply with the covenants contained
in this Article 6, from the date hereof and for so long as any part of the
Obligations is outstanding.

         SECTION 6.1 NATURE OF BUSINESS. The Borrower and Guarantor will not
permit any material change to be made in the character of its business as
carried on at the date hereof.

         SECTION 6.2 MERGERS AND CONSOLIDATIONS; SALE OF ASSETS. Without the
Lender's prior written consent, the Borrower and Guarantor will not acquire,
merge with or consolidate with any Person (whether or not such acquisition,
merger or consolidation requires any capital expenditures on the part of the
Borrower and Guarantor), nor will it sell, assign, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its property (whether now owned or hereafter acquired) to any Person.

         SECTION 6.3 ERISA COMPLIANCE. If the Borrower and Guarantor ever adopts
an employee benefit plan covered by ERISA, the Borrower and Guarantor will not
at any time permit any Plan maintained by it to engage in any "prohibited
transaction" as such term is defined in Section 4975 of the Code; incur any
"accumulated funding deficiency" as such term is defined in Section 302 of
ERISA; or terminate any such Plan in a manner which could result in the
imposition of a Lien on the property of the Borrower and Guarantor pursuant to
Section 4068 of ERISA.

                                   ARTICLE 7.
                              CONDITIONS OF LENDING

         SECTION 7.1 CONDITIONS OF LENDING. The obligation of Lender to make
extensions of credit under this Agreement is subject to the accuracy of each and
every representation and warranty of the Borrower and Guarantor made or referred
to in this Agreement, or in any certificate delivered to the Lender pursuant to
or in connection with this Agreement, to the performance by the Borrower and
Guarantor of their obligations to be performed hereunder and under the Note and
the Collateral Documents on or before the date of such extensions of credit, and
to receipt of the following on or before the Closing Date:


                                     - 16 -




<PAGE>


<PAGE>



                  (a) Agreement. Duly executed counterpart of this Agreement
signed by all the parties hereto.

                  (b) Note. The duly executed Note signed by the Borrower.

                  (c) Collateral Documents. Duly executed counterparts of the
Collateral Documents and receipt of the Collateral.

                  (d) Organization Documents. Certificates of the secretary of
the Borrower and Guarantor, setting forth evidence in form and substance
satisfactory to the Lender with respect to the authorization of this Agreement,
the Note and the Collateral Documents to be signed by each Person.

                  (e) Closing Statement. A closing statement showing all closing
costs and other initial advances under the Loan.

                  (f) Options. Favorable opinion of counsel for the Borrower and
Guarantor, in form and substance satisfactory to the Lender.

                  (g) No Adverse Change. There shall have occurred no material
adverse changes, either individually or in the aggregate, in the assets,
liabilities, financial condition, business operations, affairs or circumstances
of the Borrower or Guarantor from those reflected in the most recent financial
statements furnished to the Lender prior to the Closing Date, except to the
extent that such changes are permitted by this Agreement; furthermore, no
Default shall have occurred and be continuing.

                  (h) Capital Conversion. Verification that the intercompany
Debt owed by the Borrower to Zapata Corporation has been converted into paid in
capital.

                                   ARTICLE 8.
                                     DEFAULT

         SECTION 8.1 EVENTS OF DEFAULT. Any of the following events shall be
considered an "Event of Default" as that term is used herein:

                  (a) Principal and Interest Payments. The Borrower fails to
make payment when due of any principal or interest installment on the Loan or
any other Obligation to Lender;

                  (b) Representations and Warranties. Any representation or
warranty made by the Borrower and Guarantor in this Agreement proves to have
been incorrect in any material respect as of the date thereof; or any
representation, statement (including financial statements), certificate or data
furnished or made by the Borrower and Guarantor (or any officer, accountant or
attorney of the Borrower) under this Agreement, proves to have been


                                     - 17 -




<PAGE>


<PAGE>



untrue in any material respect as of the date as of which the facts therein set
forth were stated or certified;

                  (c) Covenants. The Borrower and Guarantor defaults in the
observance or performance of any of the covenants or agreements contained in
this Agreement, the Note or any of the Collateral Documents to be kept or
performed by the Borrower and Guarantor (other than a default under Section
8.1(a) and 8.1(b) hereof), and such default continues unremedied for a period of
30 days after the earlier of (i) written notice thereof being given by the
Lender to the Borrower or (ii) such default otherwise becoming known to the
chief financial officer of the Borrower;

                  (d) Other Debt to Lender. The Borrower defaults in the payment
of any amounts due to the Lender or in the observance or performance of any of
the covenants or agreements contained in any credit agreements, notes,
collateral or other documents relating to any Debt of the Borrower and Guarantor
to the Lender other than the Obligations incurred pursuant to this Agreement and
any grace period applicable to such default has elapsed;

                  (e) Other Debt to Other Lenders. The Borrower and Guarantor
defaults in the payment of any amounts due to any Person (other than the Lender)
or in the observance or performance of any of the covenants or agreements
contained in any credit agreements, notes, leases, collateral or other documents
relating to any Debt of the Borrower and Guarantor any Person (other than the
Lender), in excess of $50,000 and any grace period applicable to such default
has elapsed;

                  (f) Involuntary Bankruptcy or Receivership Proceedings. A
receiver, conservator, liquidator or trustee of the Borrower and Guarantor or of
any of its property is appointed by order or decree of any court or agency or
supervisory authority having jurisdiction; or an order for relief is entered
against the Borrower and Guarantor under the Federal Bankruptcy Code; or the
Borrower and Guarantor is adjudicated bankrupt or insolvent; or any material
portion of the properties of the Borrower and Guarantor is sequestered by court
order and such order remains in effect for more than thirty (30) days after the
Borrower and Guarantor obtains knowledge thereof; or a petition is filed against
the Borrower and Guarantor under any state, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or receivership law
of any jurisdiction, whether now or hereafter in effect, and such petition is
not dismissed within 60 days;

                  (g) Voluntary Petitions. The Borrower and Guarantor files a
case under the Federal Bankruptcy Code or seeks relief under any provision of
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or hereafter in
effect, or consents to the filing of any case or petition against it under any
such law;


                                     - 18 -




<PAGE>


<PAGE>



                  (h) Assignments for Benefit of Creditors. The Borrower and
Guarantor makes an assignment for the benefit of its creditors, or admits in
writing its inability to pay its debts generally as they become due, or consents
to the appointment of a receiver, trustee or liquidator of the Borrower and
Guarantor or of all or any part of its property;

                  (i) Undischarged Judgments. Judgment for the payment of money
in excess of $50,000 (which is not covered by insurance) is rendered by any
court or other governmental body against the Borrower and Guarantor, and the
Borrower and Guarantor does not discharge the same or provide for its discharge
in accordance with its terms, or procure a stay of execution thereof within 30
days from the date of entry thereof, and within said period of 30 days from the
date of entry thereof, or such longer period during which execution of such
judgement shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal while providing such reserves therefor
as may be required under generally accepted accounting principles;

         SECTION 8.2 REMEDIES. (a) Upon the happening of any Event of Default
specified in Section 8.1 (other than Sections 8.1(f) or 8.1(g) hereof), the
Lender may by written notice to the Borrower declare the entire principal amount
of all Obligations then outstanding, including interest accrued thereon, to be
immediately due and payable without presentment, demand, protest, notice of
protest or dishonor or other notice of default or any kind, all of which are
hereby expressly waived by the Borrower and Guarantor.

                  (b) Upon the happening of any Event of Default specified in
Sections 8.1(f) or 8.1(g), the entire principal amount of all Obligations then
outstanding, including interest accrued thereon, shall, without notice or action
by the Lender, be immediately due and payable without presentment, demand,
protest, notice of protest or dishonor or other notice of default of any kind,
all of which are hereby expressly waived by the Borrower and Guarantor.

                  (c) In addition to the foregoing, the Lender may exercise any
of the rights or remedies provided in the Collateral Documents or avail itself
of any other rights and remedies provided by applicable law.

         SECTION 8.3 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Lender is hereby authorized at any time
and from time to time, without notice to the Borrower and Guarantor (any such
notice being expressly waived by the Borrower and Guarantor), to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Lender
to or for the credit or the account of the Borrower and Guarantor against any
and all of the Obligations of the Borrower and Guarantor, liquidated or
unliquidated, irrespective of whether or not the Lender shall have made any
demand under this Agreement, or the Note, and although such Obligations may be
unmatured. The Lender agrees promptly to notify the Borrower after any such
set-off and application, provided that the failure to give such notice shall not
affect the validity of such set-off and application.


                                     - 19 -




<PAGE>


<PAGE>



The rights of the Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Lender may have under the Collateral Documents or otherwise.

                                   ARTICLE 9.
                                  MISCELLANEOUS

         SECTION 9.1 NOTICES. Any notice or demand which, by provision of this
Agreement, is required or permitted to be given or served by the Lender to or on
the Borrower or the Guarantor shall be deemed to have been sufficiently given
and served for all purposes (if mailed) three calendar days after being
deposited, postage prepaid, in the United States Mail, registered or certified
mail, or (if delivered by express courier) one Business Day after being
delivered to such courier, or (if delivered in person or by facsimile
transmission) the same day as delivery, in each case addressed (until another
address or addresses is given in writing by Borrower to Lender) as follows:

                  Zapata Protein (USA), Inc.
                  P.O. Box 1670
                  Mandeville, LA 70470-1670
                           or
                  3840 Highway 22
                  Mandeville, LA 70471
                  Attention: Clyde R. Gilbert
                             Vice President and Controller

                  Zapata Protein, Inc.
                  P.O. Box 1670
                  Mandeville, LA 70470-1670
                           or
                  3840 Highway 22
                  Mandeville, LA 70471
                  Attention: Clyde R. Gilbert
                             Vice President and Controller

         Any notice or demand which, by any provision of this Agreement, is
required or permitted to be given or served by Borrower to or on Lender shall be
deemed to have been sufficiently given and served for all purposes (if mailed)
three calendar days after being deposited, postage prepaid, in the United States
Mail, registered or certified mail, or (if delivered by express courier) one
Business Day after being delivered to such courier, or (if delivered in person
or by facsimile transmission) the same day as delivery, in each case addressed
(until another address or addresses are given in writing by Lender to Borrower)
as follows:


                                     - 20 -




<PAGE>


<PAGE>




                  Hibernia National Bank
                  313 Carondelet Street
                  New Orleans, Louisiana 70130
                           or
                  P.O. Box 61540
                  New Orleans, Louisiana 70161
                  Attention: Manager, Commercial Banking Department

         SECTION 9.2 INVALIDITY. In the event that any one or more of the
provisions contained in this Agreement, the Note or the Collateral Documents
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, the Note or the Collateral Documents.

         SECTION 9.3 SURVIVAL OF AGREEMENTS. All representations and warranties
of the Borrower or the Guarantor herein, and all covenants and agreements herein
not fully performed before the effective date of this Agreement, shall survive
such date.

         SECTION 9.4 SUCCESSORS AND ASSIGNS. (a) All covenants and agreements
contained by or on behalf of the Borrower and Guarantor in this Agreement, the
Note and the Collateral Documents shall bind its successors and aligns and shall
inure to the benefit of the Lender and its successors and assigns.

                  (b) This Agreement is for the benefit of the Lender and for
such other Person or Persons as may from time to time become or be the holders
of any of the Indebtedness, and this Agreement shall be transferrable and
negotiable, with the same force and effect and to the same extent as the
Indebtedness may be transferrable, it being understood that, upon the transfer
or assignment by the Lender of any of the Indebtedness, the legal holder of such
Indebtedness shall have all of the rights granted to the Lender under this
Agreement.

                  (c) Borrower and Guarantor hereby recognize and agree that the
Lender may, from time to time, one or more times, transfer all or any portion of
the Indebtedness to one or more third parties. Such transfers may include, but
are not limited to, sales of participation interests in such Obligations in
favor of one or more third party lenders. The Borrower and Guarantor
specifically agree and consent to all such transfers and assignments and the
Borrower and Guarantor further waive any subsequent notice of and right to
consent to any such transfers and assignments as may be provided under
applicable Louisiana law. The Borrower and Guarantor further agree that the
purchaser of a participation interest in the Obligations will be considered as
the absolute owner of a percentage interest of such Obligations and that such a
purchaser will have all of the rights granted to the purchaser under any
participation agreement governing the sale of such a participation interest.


                                     - 21 -




<PAGE>


<PAGE>



         SECTION 9.5 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of this
Agreement relating to the Note shall apply with equal force and effect to each
and all promissory notes or security instruments hereinafter executed which in
whole or in part represent a renewal, extension for any period, increase or
rearrangement of any part of the Note.

         SECTION 9.6 WAIVERS. No course of dealing on the part of the Lender,
its officers, employees, consultants or agents, nor any failure or delay by the
Lender with respect to exercising any of its rights, powers or privileges under
this Agreement, the Note or the Collateral Documents shall operate as a waiver
thereof.

         SECTION 9.7 CUMULATIVE RIGHTS. The rights and remedies of the Lender
under this Agreement, the Note and the Collateral Documents shall be cumulative,
and the exercise

         SECTION 9.8 SINGULAR AND PLURAL. Words used herein in the singular,
where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular herein shall apply to such words
when used in the plural where the context so permits and vice versa.

         SECTION 9.9 GOVERNING LAW. This Agreement is, and the Note will be,
contracts made under and shall be construed in accordance with and governed by
the laws of the United States of America and the State of Louisiana.

         SECTION 9.10 TITLES OF ARTICLES, SECTIONS, SUBSECTIONS. All titles or
headings to articles, sections, subsections or other divisions of this Agreement
or the exhibits hereto are only for the convenience of the parties and shall not
be construed to have any effect or meaning with respect to the other content of
such articles, sections, subsections or other divisions, such other content
being controlling as to the agreement between the parties hereto.

         SECTION 9.11 LIMITATION OF LIABILITY. This Agreement, the Note and the
Collateral Documents, are executed by an officer of the lender, and by
acceptance of the Loan, the Borrower and Guarantor agree that for the payment of
any claim or the performance of any obligations hereunder resulting from any
default by the Lender, resort shall be had solely to the assets and property of
the Lender, and no shareholder, officer, employee or agent of the Lender shall
be personally liable therefor.

         SECTION 9.12 RELATIONSHIP BETWEEN THE PARTIES. The relationship between
the Lender and the Borrower and Guarantor shall be solely that of lender and
borrower, and such relationship shall not, under any circumstances whatsoever,
be construed to be joint venture or partnership.

         SECTION 9.13 AMENDMENT. Neither this Agreement nor any provisions
hereof may be changed, waived, discharged or terminated orally or in any manner
other than by an


                                     - 22 -




<PAGE>


<PAGE>



instrument in writing signed by the party against whom enforcement of the
charge, waiver, discharge or termination is sought.

         SECTION 9.14 ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the Lender and the Borrower and Guarantor and supersedes all prior
written or oral understandings with respect thereto; provided, that all written
and oral representations, warranties and certifications made by the Borrower and
Guarantor to the Lender with respect to the Loan and the security therefor shall
survive the execution of this Agreement.

         SECTION 9.15 TIME OF THE ESSENCE. Time shall be deemed of the essence
with respect to the performance of all of the terms, provisions and conditions
on the part of the Borrower and Guarantor and the Lender to be performed
hereunder.

         SECTION 9.16 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, and it shall not be necessary that the signatures of all
parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

         SECTION 9.17 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. (a) THE
BORROWER AND GUARANTOR AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO WHICH THE BORROWER AND GUARANTOR AND THE LENDER MAY BE PARTIES,
ARISING OUT OF OR IN ANY WAY PERTAINING TO (i) THE NOTE, (ii) THIS AGREEMENT,
(iii) THE COLLATERAL DOCUMENTS OR (iv) THE PROPERTY. IT IS AGREED AND UNDERSTOOD
THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY THE BORROWER AND GUARANTOR AND THE LENDER, AND THE BORROWER
AND GUARANTOR AND THE LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR
OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY
OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWER AND GUARANTOR AND
THE LENDER FURTHER REPRESENT THAT EACH HAS BEEN REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND THAT EACH HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.

                  (b) THE BORROWER AND GUARANTOR HEREBY IRREVOCABLY CONSENT TO
THE JURISDICTION OF THE STATE COURTS OF LOUISIANA AND THE FEDERAL COURTS IN
LOUISIANA, AND AGREE THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR BROUGHT TO
ENFORCE THE PROVISIONS OF THE NOTE, THIS AGREEMENT AND/OR THE COLLATERAL
DOCUMENTS MAY BE BROUGHT IN ANY COURT HAVING SUBJECT MATTER JURISDICTION.


                                     - 23 -




<PAGE>


<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.

BORROWER:                                ZAPATA PROTEIN (USA), INC.

                                         By: ______________________________
                                         Name: Clyde  R. Gilbert
                                         Title:  Vice President and Controller

GUARANTOR:                               ZAPATA PROTEIN, INC.

                                         By: _______________________________
                                         Name: Clyde R. Gilbert
                                         Title:  Vice President and Controller

LENDER:                                  HIBERNIA NATIONAL BANK

                                         By: _______________________________
                                         Name: Steve Hemperley
                                         Title:  Vice President


                                     - 24 -




<PAGE>





<PAGE>


                               SECURITY AGREEMENT

                                   (EQUIPMENT)

     This SECURITY AGREEMENT ("Agreement", dated August 29, 1997, is made
between ZAPATA PROTEIN (USA), INC. ("Borrower") and HIBERNIA NATIONAL BANK
("Lender"), who agree as follows:

                                    RECITALS

     A. The Borrower is or will be indebted unto the Lender for loans made or to
be from time to time.

     B. In order to secure the full and punctual payment and performance of the
Indebtedness (as hereafter defined), the Borrower has agreed to execute and
deliver this Agreement and to grant a continuing security interest in and to the
Collateral (as hereafter defined).

                                    AGREEMENT
                                    ARTICLE 1

                                  GENERAL TERMS

     SECTION 1.1 TERMS DEFINED ABOVE OR ELSEWHERE. As used in this Agreement,
the terms "Agreement," Borrower" and "Lender" shall have the meanings indicated
above.

     SECTION 1.2 CERTAIN DEFINITIONS. As used in this Agreement, the following
additional terms shall have the meanings indicated:

          "Collateral" has the meaning set forth in Section 2 of this Agreement.

          "Collateral Documents" means collectively all mortgages, pledges,
security agreements and other documents by which the Borrower grants liens and
security interests in immovable or movable property to the Lender.

          "Equipment" means that equipment more particularly described on
Exhibit A attached hereto, together with all additions, accessories, parts,
attachments, special tools and accessions now and hereafter affixed thereto or
used in connection therewith, and all replacements thereof and substitutions
therefor.

          "Event of Default" has the meaning set forth in any Note, loan
agreement or instrument relating to the Indebtedness.





<PAGE>


<PAGE>



          "Indebtedness" means all present and future amounts, liabilities and
obligations of the Borrower to the Lender or any successor or transferee thereof
under or pursuant to any Note, loan agreement, this Agreement or the other
Collateral Documents, whether said amounts, liabilities or obligations are
liquidated or unliquidated, now existing or hereafter arising, including,
without limitation, all promissory notes heretofore or hereafter executed by the
Borrower pursuant to the Loan Agreement, in principal, interest, deferral and
delinquency charges, prepayment premiums, costs and attorneys' fees, as therein
stipulated, and under and pursuant to all amendments, supplements and
restatements to any of said documents.

          "Lien" means any interest in property security an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on jurisprudence, statute or contract, and including, but not
limited to, the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, servitudes, unsufructs,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting property. For the purposes of this
Agreement, the Borrower shall be deemed to be the owner of any property which it
has accrued or holds subject to a conditional sale agreement, financing lease or
other arrangement pursuant to which title to the property has been retained by
or vested in some other Person for security purposes.

          "Note" means any promissory note or notes executed by the Borrower
from time to time and payable to the Lender evidencing all or a portion of the
Indebtedness.

          "Permitted Liens" means the Security Interests, and any other Liens in
favor of the Lender or permitted by the Lender in writing to be created or
assumed or to otherwise exist on the Collateral.

          "Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other form of
entity.

          "Proceeds" means all cash and non-cash proceeds of, and all other
profits, rentals or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of, or
realization upon, Collateral, including, without limitation, all claims of the
Borrower against third parties for loss of, damage to or destruction of, or for
proceeds payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral, and any condemnation or requisition
payments with respect to any Collateral, and including proceeds of all such
proceeds, in each case whether now existing or hereafter arising.

          "Security Interests" means the security interests in the Collateral
and Proceeds granted hereunder securing the Indebtedness.





<PAGE>


<PAGE>



          "UCC" means the Uniform Commercial Code, Commercial Laws - Security
Transactions (Louisiana Revised Statutes 10:9-101 through 9-605) in the State of
Louisiana, as amended from time to time; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than Louisiana. "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or effect of perfection or
non-perfection.

                                    ARTICLE 2
                                SECURITY INTEREST

     SECTION 2.1 THE SECURITY INTERESTS. In order to secure the full and
punctual payment and performance of all present and future Indebtedness, the
Borrower hereby grants to the Lender a continuing security interest in and to
all right, title and interest of the Borrower in, to or under the following
property, whether now owned or existing or hereafter acquired or arising and
regardless of where located;

          (i) the Equipment;

          (ii) all Proceeds of all or any of the Collateral described in clause
               (i) hereof.

The term "Collateral" means each and all items and property rights described in
clauses (i) through (ii) above.

          SECTION 2.2 NO LIABILITY. The Security Interests are granted as
security only and shall not subject the Lender to, or transfer or in any way
affect or modify, any obligation or liability of the Borrower with respect to
any of the Collateral or any transaction in connection therewith.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Lender that:

     SECTION 3.1 NO LIENS. Other than financing statements or other similar or
equivalent documents or instruments with respect to the Security Interests and
Permitted Liens, no financing statement, mortgage, security agreement or similar
or equivalent document or instrument covering all or any part of the Collateral
is on file or of record in any jurisdiction in which such filing or recording
would be effective to perfect a Lien on such Collateral. No Collateral is in the
possession of any Person (other than the Borrower) asserting any claim thereto
or security interest therein, except that the Lender or its designee may have
possession of Collateral as contemplated hereby.





<PAGE>


<PAGE>



     SECTION 3.2 TITLE. The Borrower has good and merchantable title to the
Collateral, free of Liens except Permitted Liens and Liens being released
contemporaneously with the advance of funds to the Borrower under the Note, and
the Borrower will have good and merchantable title to such after-acquired
Collateral, free of Liens except Permitted Liens. Furthermore, the Borrower has
not heretofore conveyed or agreed to convey or encumber any Collateral in any
way, except in favor of the Lender.

                                    ARTICLE 4
                                    COVENANTS

     SECTION 4.1 NOTICE OF CHANGES. The Borrower will not change its name,
identity, federal tax identification number or corporate structure in any manner
unless it shall have given the Lender at least 30 days' prior written notice
thereof. The Borrower will not change the location of (i) its chief executive
office or chief place of business or (ii) the locations where it keeps or holds
any Collateral or any records relating thereto, from the applicable location
described in Article 3 unless it shall have given the Lender at least 30 days'
prior written notice thereof.

     SECTION 4.2 FILING. The Borrower agrees that a carbon, photographic,
facsimile, photostatic or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement. The Borrower shall pay all
costs of or incidental to the recording or filing of any financing, amendment,
continuation, termination or other statements concerning the Collateral.

     SECTION 4.3 CONDITION OF EQUIPMENT. The Borrower will maintain, preserve
and keep the Equipment at all times in thorough repair and good working order
and condition, and from time to time make all needful repairs, renewals and
additions so that its value and the Security Interests shall at no time become
impaired. The Borrower will not do or permit anything to be done to the
Collateral that may violate the terms of any insurance covering the Collateral
or any part thereof.

     SECTION 4.4 INSURANCE. The Borrower will maintain with financially sound
and reputable insurers, insurance with respect to the Equipment against such
liabilities, casualties, risks and contingencies and in such types and amounts
as are satisfactory to the Lender from time to time. The Borrower will keep all
such policies constantly assigned or payable to the Lender and to have attached
to each of such policies a non-contributory loss payable clause in favor of and
in form acceptable to the Lender. Upon request of the Lender, the Borrower will
furnish or cause to be furnished to the Lender from time to time a summary of
the insurance coverage of the Borrower in form and substance satisfactory to the
Lender and if requested will furnish the Lender original certificates of
insurance and/or copies of the applicable policies and all renewals thereof. In
the event the Borrower should, for any reason whatsoever, fail to keep the
Equipment or any part thereof so insured, or to keep said policies so assigned
or payable, or fail to deliver to the Lender satisfactory evidence thereof, then
the Lender, if it so elects, may itself have such insurance effected in





<PAGE>


<PAGE>



such amounts and in such companies as it may deem proper and may pay the
premiums therefor and the Borrower shall reimburse the Lender upon demand for
the amount of the premiums paid, together with interest thereon at 12% per annum
from date until paid. The Lender shall not be responsible for the solvency of
any company issuing any insurance policy, whether or not selected or approved by
it, or for the collection of any amounts due under any such policy, and shall be
responsible and accountable only for such money as may be actually received by
the Lender. The policy shall contain an agreement by the insurer not to cancel
or amend the policy without giving the Lender at least 30 days prior written
notice of its intention to do so. The Borrower will notify the Lender
immediately in writing of any material fire or other casualty to or accident
involving the Equipment, whether or not such fire, casualty or accident is
covered by insurance. The Borrower will promptly further notify the Borrower's
insurance company and submit an appropriate claim and proof of claim to the
insurance company as to any of the Collateral that is damaged or destroyed by
fire or other casualty.

     SECTION 4.5 TRANSFER AND OTHER LIENS. The Borrower will not sell, lease,
transfer, exchange or otherwise dispose of the Collateral or the Proceeds, or
any part thereof, without the prior written consent of the Lender and will not
permit any Lien to attach to the Collateral or the Proceeds, or any part
thereof, other than Permitted Liens.

     SECTION 4.6 RIGHT OF INSPECTION AND INFORMATION. The Borrower will permit
any officer, employee or agent of the Lender to visit and inspect any of the
Collateral and the Proceeds, examine the books of record and accounts of the
Borrower, take copies and extracts therefrom, and discuss the affairs, finances
and accounts of the Borrower with the Borrower's officers, accountants and
auditors, all at such reasonable times and on reasonable notice and without
hindrance and delay and as often as the Lender may reasonably desire. The
Borrower will furnish to the Lender promptly upon request and in the form and
content specified by the Lender, schedules of Equipment and other data
concerning the Collateral and the Proceeds as the Lender may from time to time
specify.

     SECTION 4.7 TAXES. The Borrower will pay as and when due and payable all
taxes, levies, license fees, assessments, and other impositions levied on the
Collateral or any part thereof before its use and operation.

     SECTION 4.8 FURTHER ASSURANCES. On request of the Lender, the Borrower will
promptly (i) correct any defect, error or omission which may be discovered in
the contents of this Agreement or any financing statement relating thereto or in
the execution or acknowledgement of this Agreement or any financing statement;
(ii) execute, acknowledge, deliver and record such further instruments
(including, without limitation, further security agreements, financing
statements and continuation statements) and do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of
this Agreement and to more fully identify and subject to the Security Interest
hereof any property intended to be covered hereby, including, without
limitation, any renewals, additions, substitutions, replacements or accessions
to the Collateral; and (iii) execute, acknowledge,





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deliver and record any document or instrument (including specifically any
financing statement) necessary, desirable or proper to protect the Lien and
Security Interest hereunder against the rights or interests of third persons.
The Borrower shall pay all costs connected with any of the foregoing.

     SECTION 4.9 COLLATERAL INDEMNITY. If the validity or priority of this
Agreement or any rights, security interests or other interests created or
evidenced hereby shall be attacked, endangered or questioned or if any legal
proceedings are instituted with respect thereto, the Borrower will give prompt
written notice thereof to the Lender and at the Borrower's own cost and expense
will diligently endeavor to cure any defect that may be developed or claimed,
and will take all necessary and proper steps for the defense of such legal
proceedings, and the Lender (whether or not named as a party to legal
proceedings with respect thereto) is hereby authorized and empowered to take
such additional steps as in its judgement and discretion may be necessary or
proper for the defense of any such legal proceedings or the protection of the
validity or priority of this Agreement and the rights, security interests and
other interests created or evidenced hereby, and all expenses so incurred of
every kind and character shall be a demand obligation owing by the Borrower to
the Lender and shall be a part of the Indebtedness.

     SECTION 4.10 COMPLIANCE WITH LAWS. The Borrower will observe and comply
with all laws, statutes, ordinances, rules, regulations, judgements, decrees,
franchises, permits, licenses, certificates and requirements of all federal,
state, parish, county, municipal and other governmental agencies, departments,
commissions, boards, courts and authorities applicable to the Borrower or to the
Collateral.

                                    ARTICLE 5
                                     DEFAULT

     SECTION 5.1 SALE. Upon the occurrence of an Event of Default, the Lender
may exercise all rights of a secured party under the UCC and other applicable
law (including the Uniform Commercial Code as in effect in another applicable
jurisdiction) and, in addition, the Lender may, without being required to give
any notice, except as herein provided or as may be required by mandatory
provisions of law, sell the Collateral and the Proceeds or any part thereof at
public or private sale, for cash, upon credit or for future delivery, and at
such price or prices as the Lender may deem satisfactory. The Lender may be the
purchaser of any or all of the Collateral and Proceeds so sold at any public
sale (or, if the Collateral and Proceeds is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). The Borrower will execute and
deliver such documents and take such other action as the Lender deems necessary
or advisable in order that any such sale may be made in compliance with law.
Upon any such sale the Lender shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral and Proceeds so sold. Each
purchaser at any such sale shall hold the Collateral and Proceeds so sold to it
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of the Borrower. The





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Borrower, to the extent permitted by law, hereby specifically waives all rights
of appraisal which it has or may have under any law now existing or hereafter
adopted. The Borrower agrees that 10 days prior written notice of the time and
place of any sale or other intended disposition of any of the Collateral and
Proceeds constitutes "reasonable notification" within the meaning of Section
9-504(3) of the UCC, except that shorter or no notice shall be reasonable as to
any Collateral and Proceeds which is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market. The notice (if
any) of such sale shall (1) in case of a public sale, state the time and place
fixed for such sale and (2) in the case of a private sale, state the date after
which such sale may be consummated. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Lender may fix in the notice of such sale. At any such sale the Collateral and
Proceeds may be sold in one lot as an entirety or in separate parcels or
portions, as the Lender may determine. The Lender shall not be obligated to make
any such sale pursuant to any such notice. The Lender may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned.

     SECTION 5.2 FORECLOSURE. The Lender, instead of exercising the power of
sale herein conferred upon it, may proceed by a suit or suits at law or in
equity to foreclose the Security Interests and sell the Collateral and Proceeds,
or any portion thereof, under a judgement or decree of a court or courts of
competent jurisdiction. For the purposes of Louisiana executory process
procedures, the Borrower does hereby acknowledge the Indebtedness and confess
judgement in favor of the Lender for the full amount of the Indebtedness. The
Borrower does by these presents consent and agree that upon the occurrence of an
Event of Default it shall be lawful for the Lender to cause all and singular the
Collateral and Proceeds to be seized and sold under executory or ordinary
process, at the Lender's sole option, without appraisement, appraisement being
hereby expressly waived, in one lot as an entirety or in separate parcels or
portions as the Lender may determine to the highest bidder, and otherwise
exercise the rights, powers and remedies afforded herein and under applicable
Louisiana law. Any and all declarations of fact made by authentic act before a
Notary Public in the presence of two witnesses by a person declaring that such
facts lie within his knowledge shall constitute authentic evidence of such facts
for the purpose of executory process. The Borrower, to the extent permitted by
law, hereby specifically waives all rights of appraisal which it has or may have
under any law now existing or hereafter arising. In the event the Collateral (or
Proceeds) or any part thereof is seized as an incident to an action for the
recognition or enforcement of this Agreement by executory process, ordinary
process, sequestration, writ of fieri facias, or otherwise, the Borrower and the
Lender agree that the court issuing any such order shall, if petitioned for by
the Lender, direct the applicable sheriff to appoint as a keeper of the
Collateral and Proceeds, the Lender or any agent designed by the Lender or any
person named by the Lender at any time such seizure is effected. This
designation is pursuant to Louisiana Revised Statutes 9:5136-9:5140.2 and the
Lender shall be entitled to all the rights and benefits afforded thereunder as
the same may be amended. It is hereby agreed that the keeper shall be entitled
to





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receive as compensation, in excess of its reasonable costs and expenses incurred
in the administration or preservation of the Collateral and Proceeds, an amount
equal to five percent of the gross revenues and other amounts received by the
keeper, payable on a monthly basis. The designation of keeper made herein shall
not be deemed to require the Lender to provoke the appointment of such a keeper.

     SECTION 5.3 ASSEMBLE COLLATERAL. For the purpose of enforcing any and all
rights and remedies under this Agreement the Lender may (i) require the Borrower
to, and the Borrower agrees that it will, at its expense and upon the request of
the Lender, forthwith assemble all or any part of the Collateral and Proceeds as
directed by the Lender and make it available at a place designated by the Lender
which is, in its opinion, reasonably convenient to the Lender and the Borrower,
whether at the premises of the Borrower or otherwise, and Lender shall be
entitled to specific performance of this obligation, (ii) to the extent
permitted by applicable law of this or any other state, enter, with or without
process of law and without breach of the peace, any premise where any of the
Collateral or Proceeds is or may be located, and without charge or liability to
it seize and remove such Collateral or Proceeds from such premises, (iii) have
access to and use the Borrower's books and records relating to the Collateral
and Proceeds and (iv) prior to the disposition of the Collateral and Proceeds,
store or transfer it without charge in or by means of any storage or
transportation facility owned or leased by the Borrower, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent the Lender deems appropriate and, in connection with such preparation and
disposition, use without charge any trademark, trade name, copyright, patent or
technical process used by the Borrower.

     SECTION 5.4 LIMITATION ON DUTY OF LENDER. Beyond the exercise of reasonable
care in the custody thereof, the Lender shall have no duty as to any Collateral
or Proceeds in its possession or control or in the possession or control of any
agent or bailee or any income thereon. The Lender shall be deemed to have
exercised reasonable care in the custody of the Collateral and Proceeds in its
possession if the Collateral and Proceeds is accorded treatment substantially
equal to that which it accords it owns property, and shall not be liable or
responsible for any loss or damage to any of the Collateral or Proceeds, or for
any diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Lender in good faith. The Borrower agrees that the Lender shall
not be obligated to preserve rights against prior parties obligated on any
instruments.

     SECTION 5.5 APPOINTMENT OF AGENT. At any time or times, in order to comply
with any legal requirement in any jurisdiction, the Lender may appoint a bank or
trust company or one or more other Persons with such power and authority as may
be necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment.





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<PAGE>



     SECTION 5.6 EXPENSES. In the event that the Borrower fails to comply with
any provisions of this Agreement or the Collateral Documents, such that the
value of any Collateral or the validity, perfection, rank or value of any
Security Interest hereunder is thereby diminished or potentially diminished or
put at risk, the Lender may, but shall not be required to, effect such
compliance on behalf of the Borrower, and the Borrower shall reimburse the
Lender for the costs thereof on demand. All insurance expenses and all expenses
of protecting, storing, warehousing, appraising, preparing for sale, handling,
maintaining and shipping the Collateral, any and all excise, property, sales,
and use taxes imposed by any federal, state or local authority on any of the
Collateral, all expenses in respect of periodic appraisals and inspections of
the Collateral to the extent the same may be requested from time to time, and
all expenses in respect of the sale or other disposition thereof shall be borne
and paid by the Borrower, and if the Borrower fails to promptly pay any portion
thereof when due, the Lender may, at its option, but shall not be required to,
pay the same and charge the Borrower's account therefor, and the Borrower agrees
to reimburse the Lender therefor on demand. All sums so paid or incurred by the
Lender for any of the foregoing and any and all other sums for which the
Borrower may become liable hereunder and all costs and expenses (including
reasonable attorneys' fees, legal expenses and court costs) incurred by the
Lender in enforcing or protecting the Security Interests or any of its rights or
remedies under this Agreement or the Collateral Documents, shall, together with
interest thereon until paid at the rate equal the then highest rate of interest
charged on the principal of any of the Indebtedness plus one percent (1%), be
additional Indebtedness hereunder and Borrower agrees to pay all of the
foregoing sums promptly on demand.

                                    ARTICLE 6
                                  MISCELLANEOUS

     SECTION 6.1 NOTICES. Any notice or demand which, by provision of this
Agreement, is required or permitted to be given or served to the Borrower and
the Lender shall be deemed to have been sufficiently given and served for all
purposes if make [in accordance with the Loan Agreement] to the following
addresses:

          If to Borrower:        Zapata Protein (USA), Inc.
                                 P.O. Box 1670
                                 Mandeville, LA 70470-1670
                                        or
                                 3840 Highway 22
                                 Mandeville, LA 70471
                                 Attention:   Clyde R. Gilbert
                                              Vice President and Controller

          If to Lender:          P.O. Box 61540
                                 New Orleans, LA 70161
                                        or




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<PAGE>



                                 313 Carondelet Street
                                 New Orleans, LA 70130
                                 Attention:  Manager, Commercial Banking


     SECTION 6.2 AMENDMENT. Neither this Agreement nor any provisions thereof
may be changed, waived, discharged or terminated orally or in any manner other
than by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought.

     SECTION 6.3 WAIVERS. No course of dealing on the part of the Lender, its
officers, employees, consultants or agents, nor any failure or delay by the
Lender with respect to exercising any of its rights, powers or privileges under
this Agreement shall operate as a waiver thereof.

     SECTION 6.4 CUMULATIVE RIGHTS. The rights and remedies of the Lender under
this Agreement and the other Collateral Documents shall be cumulative, and the
exercise or partial exercise of any such right or remedy shall not preclude the
exercise of any other right or remedy.

     SECTION 6.5 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles or
headings to articles, sections, subsections or other divisions of this Agreement
or the exhibits hereto are only for the convenience of the parties and shall not
be construed to have any effect or meaning with respect to the other content of
such articles, sections, subsections or other divisions, such other content
being controlling as to the agreement between the parties hereto.

     SECTION 6.6 SINGULAR AND PLURAL. Words used herein in the singular, where
the context so permits, shall be deemed to include the plural and vice versa.
The definitions of words in the singular herein shall apply to such words when
used in the plural where the context so permits and vice versa.

     SECTION 6.7 GOVERNING LAW. This Agreement is a contract made under and
shall be construed in accordance with and governed by the laws of the United
States of America and the State of Louisiana.

     SECTION 6.8 TERMINATION. Upon full and final payment and performance of the
Indebtedness and the termination of the Loan Agreement, this Agreement shall
terminate, and the Lender shall pay to the Borrower all amounts then remaining
in the possession of the Lender from collections on or proceeds of the
Collateral. Upon request of the Borrower, the Lender shall execute and deliver
to the Borrower at the Borrower's expense such termination statements as the
Borrower may reasonably request to evidence such termination.





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<PAGE>


     SECTION 6.9 SUCCESSORS AND ASSIGNS. (a) All covenants and agreements
contained by or on behalf of the Borrower in this Agreement shall bind its
successors and assigns and shall inure to the benefit of the Lender and its
successors and assigns.

          (b) This Agreement is for the benefit of the Lender and for such other
Person or Persons as may from time to time become or be the holders of any of
the Indebtedness, and this Agreement shall be transferable and negotiable, with
the same force and effect and to the same extent as the Indebtedness may be
transferrable, it being understood that, upon the transfer or assignment by the
Lender of any of the Indebtedness, the legal holder of such Indebtedness shall
have all of the rights granted to the Lender under this Agreement.

          (c) The Borrower hereby recognizes and agrees that the Lender may,
from time to time, one or more times, transfer all or any portion of the
Indebtedness to one or more third parties. Such transfers may include, but are
not limited to, sales of participation interests in such Indebtedness in favor
of one or more third party lenders. Upon any transfer of all or any portion of
the Indebtedness, the Lender may transfer and deliver any or all of the
Collateral to the transferee of such Indebtedness and such Collateral shall
secure any and all of the Indebtedness in favor of such a transferee then
existing and thereafter arising, and after any such transfer has taken place,
the Lender shall be fully discharged from any and all future liability and
responsibility to Borrower with respect to such Collateral, and the transferee
thereafter shall be vested with all powers, rights and duties with respect to
such Collateral.

     SECTION 6.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof; each counterpart shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.


BORROWER:                            ZAPATA PROTEIN (USA), INC.

                                     By:
                                        -------------------------------------
                                        Name: Clyde R. Gilbert
                                        Title:  Vice President and Controller


LENDER:                              HIBERNIA NATIONAL BANK

                                     By:
                                        -------------------------------------
                                        Name: Steve Hemperley
                                        Title:  Vice President






<PAGE>





<PAGE>



                               GUARANTY AGREEMENT

BORROWER:                                     LENDER:
Zapata Protein (USA), Inc.                    Hibernia National Bank
3840 Highway 22                               313 Carondelet Street
Mandeville, LA 70471                          New Orleans, LA 70130

GUARANTOR:
Zapata Protein, Inc.
3840 Highway 22
Mandeville, LA 70471

- --------------------------------------------------------------------------------

     This Guaranty Agreement (this "Agreement"), dated as of August 29, 1997, is
made by ZAPATA PROTEIN, INC. (the "Guarantor") in favor of HIBERNIA NATIONAL
BANK (the "Lender"), guaranteeing the Indebtedness (as hereinafter defined) of
Zapata Protein (USA), Inc. (the "Borrower") pursuant to that certain Loan
Agreement to be entered into between the Borrower and the Lender (as same may be
amended, supplemented or restated, the "Loan Agreement").

     SECTION 1. GUARANTY OF BORROWER'S INDEBTEDNESS. Guarantor absolutely and
unconditionally does hereby guarantee the prompt and punctual payment of all
present and future indebtedness, amounts and liabilities of the Borrower to the
Lender incurred pursuant to the Loan Agreement between the Borrower and the
Lender of even date herewith (as amended from time to time, the "Loan
Agreement"), liquidated or unliquidated, now existing or hereafter arising, in
principal, interest, deferral and delinquency charges, prepayment premiums,
costs and attorneys' fees (collectively, the "Indebtedness"). The maximum amount
of Indebtedness guaranteed hereby is fifty million dollars.

     SECTION 2. JOINT, SEVERAL AND SOLIDARY LIABILITY. Guarantor further agrees
that its obligations and liabilities for the prompt and punctual payment,
performance and satisfaction or purchase of all of Borrower's Indebtedness shall
be on a "joint and several" and "solidary" basis with Borrower to the same
degree and extent as if Guarantor had been and/or will be a co-borrower,
co-principal obligor and/or co-maker of all of Borrower's Indebtedness, but
limited to the amount of Borrower's Indebtedness guaranteed hereunder. In the
event that there are other guarantors, endorsers or sureties of all or any
portion of Borrower's Indebtedness, Guarantor's obligations and liabilities
hereunder shall be on a "joint and several" and "solidary" basis along with such
other guarantor or guarantors, endorsers and/or sureties, up to the Amount
Guaranteed.





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<PAGE>



     SECTION 3. DURATION. This Agreement and Guarantor's obligations and
liabilities hereunder shall remain in full force and effect until such time as
all of Borrower's Indebtedness shall be paid, performed and/or satisfied in
full, in principal, interest, costs and attorneys' fees, or Guarantor has paid
the Amount Guaranteed, whichever event occurs first.

     SECTION 4. DEFAULT BY BORROWER. Should an Event of Default occur, Guarantor
unconditionally and absolutely agrees to pay the unpaid amount of Borrower's
Indebtedness guaranteed hereunder. Such payment or payments shall be made
immediately following written demand by Lender at Lender's address stated above.
Guarantor hereby waives notice of acceptance of this Agreement and of any
Indebtedness to which it applies or may apply. Guarantor further waives
presentment and demand for payment of Borrower's Indebtedness, notice of
dishonor and of nonpayment, notice of intention to accelerate, notice of
acceleration, protest and notice of protest, collection or institution of any
suit or other action by Lender in collection thereof, including any notice of
default in payment thereof or other notice to or demand for payment thereof on
any party. Guarantor additionally waives any and all rights and pleas of
division and discussion as provided under Louisiana law, as well as, to the
degree applicable, any similar rights as may be provided under the laws of any
other state.

     SECTION 5. GUARANTOR'S SUBORDINATION OF RIGHTS. In the event that Guarantor
should for any reason (A) advance or lend monies to Borrower, whether or not
such funds are used by Borrower to make payment(s) under Borrower's
Indebtedness, and/or (B) make any payment(s) to Lender or others for and on
behalf of Borrower under Borrower's Indebtedness, and/or (C) make any payment to
Lender in total or partial satisfaction of Guarantor's obligations and
liabilities under this Agreement, Guarantor hereby agrees that any and all
rights that Guarantor may have or acquire to collect from or to be reimbursed by
Borrower (or from or by any other guarantor, endorser or surety of Borrower's
Indebtedness), whether Guarantor's rights of collection or reimbursement arise
by way of subrogation to the rights of Lender or otherwise, shall in all
respects, whether or not Borrower is presently or subsequently becomes
insolvent, be subordinate, inferior and junior to the rights of Lender to
collect and enforce payment, performance and satisfaction of Borrower's then
remaining Indebtedness until such time as Borrower's Indebtedness are fully paid
and satisfied. In the event of Borrower's insolvency or consequent liquidation
of Borrower's assets, through bankruptcy, by an assignment for the benefit of
creditors, by voluntary liquidation or otherwise, the assets of Borrower
applicable to the payment of claims of both Lender and Guarantor shall be paid
to Lender and shall be first applied by Lender to Borrower's then remaining
Indebtedness. Guarantor hereby assigns to Lender all claims which it may have or
acquire against Lender for full payment of Borrower's Indebtedness guaranteed
under this Agreement.

     SECTION 6. COVENANTS RELATING TO THE INDEBTEDNESS. Guarantor further agrees
that Lender may, at its sole option, at any time, and from time to time, without
the consent of or notice to Guarantor, or any one of them, or to any other party
and without incurring any responsibility to Guarantor or to any other party, and
without impairing or releasing the


                                      - 2 -




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<PAGE>



obligations of Guarantor under this Agreement:

          A.   Discharge or release any party (including, but not limited to,
               Borrower or any co-guarantor under this Agreement) who is or may
               be liable to Lender for any of Borrower's Indebtedness;

          B.   Sell, exchange, release, surrender, realize upon or otherwise
               deal with, in any manner and in any order, any collateral
               directly or indirectly securing repayment of any of Borrower's
               Indebtedness;

          C.   Change the manner, place or terms of payment, or change or extend
               the time of payment of or renew, as often and for such periods as
               Lender may determine, or alter, any of Borrower's Indebtedness;

          D.   Settle or compromise any of Borrower's Indebtedness;

          E.   Subordinate and/or agree to subordinate the payment of all or any
               part of Borrower's Indebtedness or Lender's security rights in
               and/or to any collateral directly or indirectly security any such
               Indebtedness, to the payment and/or security rights of any other
               present and/or future creditors of Borrower;

          F.   Apply any sums paid to any of Borrower's Indebtedness, with such
               payments being applied in such priority or with such preferences
               as Lender may determine in its sole discretion, regardless of
               what Indebtedness of Borrower remain unpaid; provided that Lender
               shall apply sums paid by Guarantor under this Guaranty to the
               Amount Guaranteed;

          G.   Take or accept any other security or guaranty for any or all of
               Borrower's Indebtedness;

          H.   Enter into, deliver, modify, amend or waive compliance with, any
               instrument or arrangement evidencing, securing or otherwise
               affecting, all or any part of Borrower's Indebtedness.

     In addition, no course of dealing between Lender and Borrower (or any other
guarantor, surety or endorser of Borrower's Indebtedness), nor any failure or
delay on the part of Lender to exercise any of Lender's rights and remedies, or
any other agreement or agreements by and between Lender and Borrower (or any
other guarantor, surety or endorser) shall have the affect of impairing or
releasing Guarantor's obligations and liabilities to Lender or of waiving any of
Lender's rights and remedies. Any partial exercise of any rights and remedies
granted to Lender shall furthermore not constitute a waiver of any of Lender's
other rights and remedies, it being Guarantor's intent and agreement that
Lender's rights and


                                      - 3 -




<PAGE>


<PAGE>



remedies shall be cumulative in nature. Guarantor further agrees that, should
Borrower default under any of Borrower's Indebtedness, any waiver or forbearance
on the part of Lender to pursue the rights and remedies available to Lender
shall be binding upon Lender only to the extent that Lender specifically agrees
to such waiver or forbearance in writing. A waiver or forbearance on the part of
Lender as to one default shall not constitute a waiver or forbearance as to any
other default.

     SECTION 7. NO RELEASE OF GUARANTOR. Guarantor's obligations and liabilities
under this Agreement shall not be released, impaired, reduced (except to the
extent that Borrower's indebtedness is reduced or the Amount Guaranteed hereby
is reduced) or otherwise affected by, and shall continue in full force and
effect, notwithstanding the occurrence of any event, including, without
limitation, any one or more of the following events:

          A.   Death, insolvency, bankruptcy, arrangement, adjustment,
               composition, liquidation, disability, dissolution or lack of
               authority (whether corporate, partnership or trust) of Borrower
               (or any person acting on Borrower's behalf), or any other
               guarantor, surety or endorser of any of Borrower's Indebtedness;

          B.   Partial payment or payments of any amount due and/or outstanding
               under any of Borrower's Indebtedness other than payments by
               Guarantor to Lender of the Amount Guaranteed hereunder;

          C.   Any payment by Borrower or any other party to Lender is held to
               constitute a preferential transfer or a fraudulent conveyance
               under any applicable law, or for any reason Lender is required to
               refund such payment or pay such amount to Borrower or to any
               other person;

          D.   Any dissolution of Borrower or any sale, lease or transfer of all
               or any part of Borrower's assets; and/or

          E.   Any failure of Lender to notify Guarantor of the acceptance of
               this Agreement or of the making of loans or other extensions of
               credit in reliance on this Agreement or of the failure of
               Borrower to make any payment due by Borrower to Lender.

     This Agreement and Guarantor's obligations and liabilities hereunder shall
continue to be effective, and/or shall automatically and retroactively be
reinstated if a release or discharge has occurred, as the case may be, if at any
time any payment or part thereof to Lender with respect to any of Borrower's
Indebtedness is rescinded or must otherwise be restored by Lender pursuant to
any insolvency, bankruptcy, reorganization, receivership or any other debt
relief granted to Borrower or to any other party. In the event that Lender must
rescind or restore any payment received by Lender in satisfaction of Borrower's
Indebtedness, any prior release or discharge from the terms of this Agreement
given to


                                      - 4 -




<PAGE>


<PAGE>



Guarantor shall be without effect, and this Agreement and Guarantor's
obligations and liabilities hereunder shall automatically be renewed or
reinstated and shall remain in full force and effect to the same degree and
extent as if such a release or discharge was never granted. It is the intention
of Lender and Guarantor that Guarantor's obligations and liabilities hereunder
shall not be discharged except by Borrower's and Guarantor's full and complete
performance of such obligations and liabilities and then only to the extent of
such performance.

     SECTION 8. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that the representations and warranties made in writing by the Borrower
and Guarantor pursuant to the Loan Agreement are true and correct.

     SECTION 9. COVENANTS CONTAINED IN LOAN AGREEMENT. Guarantor will at all
times comply with the affirmative and negative covenants imposed on Guarantor
pursuant to the Loan Agreement.

     SECTION 10. ENFORCEMENT OF GUARANTOR'S INDEBTEDNESS AND LIABILITIES.
Guarantor agrees that following the occurrence of an Event of Default, should
Lender deem it necessary to file an appropriate collection action to enforce
Guarantor's obligations and liabilities under this Agreement, Lender may
commence such a civil action against Guarantor without the necessity of first
(i) attempting to collect Borrower's Indebtedness from Borrower or from any
other guarantor, surety or endorser, whether through filing of suit or
otherwise, (ii) attempting to exercise against any collateral directly or
indirectly securing repayment of any of Borrower's Indebtedness, whether through
the filing of an appropriate foreclosure action or otherwise or (iii) including
Borrower or any other guarantor, surety or endorser of any of Borrower's
Indebtedness as an additional party defendant in such a collection action
against Guarantor. If there is more than one guarantor under this Agreement,
Guarantor additionally agrees that Lender may file an appropriate collection
and/or enforcement action against any one or more of them, without impairing the
rights of Lender against any other guarantor under this Agreement. In the event
that Lender should ever deem it necessary to refer this Agreement to an
attorney-at-law for the purpose of enforcing Guarantor's obligations and
liabilities hereunder, or of protecting or preserving Lender's rights hereunder,
Guarantor agrees to reimburse Lender for the reasonable fees of such an
attorney. Guarantor additionally agrees that Lender shall not be liable for
failure to use diligence in the collection of any of Borrower's Indebtedness or
any collateral security therefor, or in creating or preserving the liability of
any person liable on any such Indebtedness, or in creating, perfecting or
preserving any security for any such Indebtedness.

     SECTION 11. ADDITIONAL DOCUMENTS. Upon the reasonable request of Lender,
Guarantor will, at any time and from time to time, duly execute and deliver to
Lender any and all such further instruments and documents and supply such
additional information as may be necessary or advisable in the opinion of Lender
to further evidence or perfect this Agreement.


                                      - 5 -




<PAGE>


<PAGE>



     SECTION 12. TRANSFER OF INDEBTEDNESS. This Agreement is for the benefit of
Lender and for such other person or persons as may from time to time become or
be the holders of any of Borrower's Indebtedness hereby guaranteed, and this
Agreement shall be transferrable and negotiable with the same force and effect
and to the same extent as Borrower's Indebtedness may be transferrable, it being
understood that, upon the transfer or assignment by Lender of any of Borrower's
Indebtedness hereby guaranteed, the legal holder of such Indebtedness shall have
all of the rights granted to Lender under this Agreement.

     Guarantor hereby recognizes and agrees that Lender may, from time to time,
one or more times, transfer all or any portion of Borrower's Indebtedness to one
or more third parties. Such transfers may include, but are not limited to, sales
of a participation interest in such Indebtedness in favor of one or more third
party lenders. Guarantor specifically agrees and consents to all such transfers
and assignments, and Guarantor further waives any subsequent notice of and right
to consent to any such transfers and assignments as may be provided under
applicable Louisiana law. Guarantor additionally agrees that the purchaser of a
participation interest in Borrower's Indebtedness will be considered as the
absolute owner of a percentage interest of such Indebtedness and that such a
purchaser will have all of the rights granted to the purchaser under any
participation agreement governing the sale of such a participation interest.
Guarantor further waives any right of offset that Guarantor may have against
Lender and/or any purchaser of such a participation interest in Borrower's
Indebtedness, and Guarantor unconditionally agrees that either Lender or such a
purchaser may enforce Guarantor's obligations and liabilities under this
Agreement irrespective of the failure or insolvency of Lender or any such
purchaser.

     SECTION 13. RIGHT OF OFFSET. As collateral security for the repayment of
Guarantor's obligations and liabilities under this Agreement, Guarantor hereby
grants Lender, as well as its successors and assigns, the right to apply, at any
time and from time to time following the occurrence of an Event of Default under
the Loan Agreement, any and all funds that Guarantor may then have on deposit
with or in the possession or control of Lender and its successors or assigns
(with the exception of funds deposited in IRA, pension or other tax-deferred
deposit accounts) towards repayment of any of Borrower's Indebtedness subject to
this Agreement.

     SECTION 14. CONSTRUCTION. The provisions of this Agreement shall be in
addition to and cumulative of, and not in substitution, novation or discharge
of, any and all prior or contemporaneous guaranty or other agreements by
Guarantor (or any one or more of them) in favor of Lender or assigned to Lender
by others, all of which shall be construed as complementing each other. Nothing
herein contained shall prevent Lender from enforcing any and all such other
guaranties or agreements in accordance with their respective terms. Nothing
herein shall constitute a waiver of any notice requirement in Borrower's favor,
or any curative right provided in the Loan Agreement.


                                      - 6 -




<PAGE>


<PAGE>



     SECTION 15. AMENDMENT. No amendment, modification, consent or waiver of any
provision of this Agreement, and no consent to any departure by Guarantor
therefrom, shall be effective unless the same shall be in writing signed by a
duly authorized officer of Lender, and then shall be effective only to the
specific instance and for the specific purpose for which given.

     SECTION 16. SUCCESSORS AND ASSIGNS BOUND. Guarantor's obligations and
liabilities under this Agreement shall be binding upon Guarantor's successors,
heirs, legatees, devisees, administrators, executors and assigns. The rights and
remedies granted to Lender under this Agreement shall also inure to the benefit
of Lender's successors and assigns, as well as to any and all subsequent holder
or holders of any of Borrower's Indebtedness subject to this Agreement.

     SECTION 17. CAPTION HEADINGS. Caption headings of the sections of this
Agreement are for convenience purposes only and are not to be used to interpret
or to define their provisions. In this Agreement, whenever the context so
requires, the singular includes the plural and the plural also includes the
singular.

     SECTION 18. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the substantive laws of the State of Louisiana.

     SECTION 19. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, this Agreement shall
be construed and enforceable as if the illegal, invalid or unenforceable
provision had never comprised a part of it, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.

     SECTION 20. NOTICES. Any notice or demand which, by provision of this
Agreement, is required or permitted to be given or served by Lender to or on
Guarantor shall be deemed to have been sufficiently given and served for all
purposes (if mailed) three calendar days after being deposited, postage prepaid,
in the United States Mail, registered or certified mail, or (if delivered by
express courier) one business day after being delivered to such courier, or (if
delivered in person) the same day as delivery, in each case addressed (until
another address or addresses is given in writing by Guarantor) to the address
set forth above.

     Any notice or demand which, by provision of this Agreement, is required or
permitted to be given or served by Guarantor to or on Lender shall be deemed to
have been sufficiently given and served for all purposes (if mailed) three
calendar days after being deposited, postage prepaid, in the United States Mail,
registered or certified mail, or (if delivered by express courier) one business
day after being delivered to such courier, or (if delivered in person) the same
day as delivery, in each case addressed (until another address or addresses are
given in writing by Lender to Guarantor) to the address set forth above.


                                      - 7 -




<PAGE>


<PAGE>



     SECTION 21. WAIVER OF JURY TRIAL. GUARANTOR AND LENDER HEREBY WAIVE THE
RIGHTS TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER AGAINST THE OTHER.

     SECTION 22. ACCEPTANCE. No formal acceptance by the Lender is necessary to
make this Agreement effective.


                                      - 8 -




<PAGE>


<PAGE>


     IN WITNESS WHEREOF, Guarantor has executed this Agreement in favor of
Lender on the day, month and year first above written.


                                    ZAPATA PROTEIN, INC.

                                    By:
                                       -----------------------------------
                                       Name: Clyde R. Gilbert
                                       Title:  Vice President and Controller


                                      - 9 -





<PAGE>





<PAGE>

                    UNITED STATES GUARANTEED PROMISSORY NOTE

City and State   Washington, D.C.                                     No. B-9686

Date  March 31, 1993                                          Case No. OG-G-1000

THIS IS A PROMISSORY NOTE GUARANTEED BY THE UNITED STATES OF AMERICA (THE
"NOTE").

THIS NOTE WILL BE PAID BY Zapata Haynie Corporation               (THE "PAYOR").

THIS NOTE WILL BE PAID TO Bear, Stearns Securities Corp.

at 245 Park Avenue, New York, New York 10167           (THE "PAYEE").

THIS NOTE'S PRINCIPAL AMOUNT IS Six Hundred Twenty-one Thousand Six Hundred
Twenty          dollars ($621,620.00)                         (THE "PRINCIPAL").

THIS NOTE'S INTEREST RATE IS six and sixty-three one-hundredths percent (6.63%)
APR          (THE "INTEREST RATE").

THIS NOTE'S PAYMENT PROVISIONS ARE Sixteen Thousand and Twenty-two Dollars
($16,022.00), including principal and interest quarterly, with the balance of
principal and interest due on November 22, 2008. The first quarterly payment
shall be due three months from the date of this Note and each quarterly payment
thereafter shall be due on the date of the month that the first quarterly
payment is due hereunder (THE "PAYMENT PROVISIONS").

THIS NOTE MAY BE PREPAID at any time without penalty.

         PAYEE HEREBY LENDS THE PRINCIPAL TO PAYOR. PAYOR HEREBY ACKNOWLEDGED
RECEIPT OF THE PRINCIPAL FROM PAYEE. FOR VALUE RECEIVED, PAYOR PROMISES TO PAY
THE PRINCIPAL TO THE ORDER OF PAYEE WITH INTEREST AT THE INTEREST RATE AND IN
ACCORDANCE WITH THE PAYMENT PROVISIONS. PAYMENT SHALL BE AT PAYEE'S ADDRESS
ABOVE UNLESS PAYEE DESIGNATES IN WRITING A DIFFERENT ADDRESS.

         INTEREST SHALL APPLY TO ALL UNPAID PRINCIPAL FROM THE DATE OF THIS
NOTE. INTEREST IS SIMPLE INTEREST. INTEREST SHALL ACCRUE ON THE BASIS OF 30-DAY
MONTHS AND 360-DAY YEARS.

         ALL PAYMENT ON THIS NOTE SHALL FIRST BE APPLIED TO ACCRUED INTEREST.
ANY REMAINDER SHALL BE APPLIED TO THE PRINCIPAL.

         PAYEE MAY DECLARE THE FULL UNPAID AMOUNT OF THIS NOTE IMMEDIATELY DUE
AND PAYABLE AT ANY TIME PAYOR FAILS TO KEEP HIS PROMISE. THE PAYOR'S PROMISE IS
UNCONDITIONAL. PAYOR'S OBLIGATION UNDER THIS NOTE SHALL NOT BE IMPAIRED BY
PAYEE'S INDULGENCE. THIS NOTE IS THE ENTIRE CONTRACT BETWEEN PAYOR AND PAYEE.
PAYOR'S OBLIGATION IS JOINT AND SEVERAL IF MORE THAN ONE PARTY IS INVOLVED.

         THIS IS THE NOTE REFERRED TO IN THE GUARANTEE APPEARING AT THE BOTTOM
OF THIS DOCUMENT.

Attest:_________________________  Zapata Protein (USA), Inc.

By:_____________________________  By:___________________________________________

Secretary_______________________  Vice President and Controller


                    GUARANTEE OF THE UNITED STATES OF AMERICA

                  THIS IS A GUARANTEE OF THE NOTE APPEARING AT THE TOP OF THIS
         DOCUMENT (THE "GUARANTEE").

                  THE GUARANTOR IS THE UNITED STATES OF AMERICA, ACTING BY AND
         THROUGH THE SECRETARY OF COMMERCE (THE "GUARANTOR").

                  THE PAYEE IS THE SAME AS IN THE NOTE.

                  GUARANTOR HEREBY PLEDGES ITS FULL FAITH AND CREDIT TO PAYMENT
         IN FULL OF THE NOTE. ALL UNPAID PRINCIPAL AND INTEREST (INCLUDING
         INTEREST THROUGH THE DATE OF GUARANTOR'S PAYMENT) IS HEREBY GUARANTEED.
         THE VALIDITY OF THIS GUARANTEE IS INCONTESTABLE AS TO ANY LAWFUL HOLDER
         OF THE NOTE.

                  THIS GUARANTEE IS SUBJECT TO THE CONDITIONS APPEARING ON THE
         BACK OF THIS DOCUMENT.

                  THE DATE OF THIS GUARANTEE IS THE SAME AS IN THE NOTE.

                            UNITED STATES OF AMERICA
                            SECRETARY OF COMMERCE
                            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

                            __________________________________________
                            CHIEF, FINANCIAL SERVICES BRANCH
                            SOUTHEAST REGION

                            __________________________________________
                            NATIONAL MARINE FISHERIES SERVICE






<PAGE>





<PAGE>



Case No. OG-G-1000

                                 AMENDMENT NO. 1
                                       TO
                 PROMISSORY NOTE TO THE UNITED STATES OF AMERICA

     THIS AMENDMENT NO. 1 effective the 31st day of March, 1993, ("Amendment No.
1 to the Note") to Promissory Note to the United States of America, acting by
and through the Secretary of Commerce (the "Payee") dated November 22, 1988, by
Zapata Haynie Corporation (the "Payor") (the "Note").

WITNESSETH:

     WHEREAS, the Note was given (1) in consideration of the guaranteeing the
payment of the unpaid interest on and the unpaid balance of the principal of a
certain promissory note (the "Guaranteed Note") to Delta Life Securities, Inc.,
and subsequently assigned to Delta Life & Annuity Company, and (2) to secure
payment by Payor to the Payee of any amount that the Secretary may be required
to pay to the holder of the Guaranteed Note and,

     WHEREAS, it is the desire of the Payor to refinance the debt remaining on
the Guaranteed Note, and

     WHEREAS, the Guaranteed Note has been replaced with a New Guaranteed Note
No. B-9686, dated March 31, 1993, and

     WHEREAS, this Amendment No. 1 is executed to reflect the changes in
repayment resulting from the refinancing.

     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree:

     To amend paragraphs 1 and 2 of the Note in their entirety to read as
follows:

     FOR VALUE RECEIVED, the undersigned (the "Payor") promises to pay to the
order of the UNITED STATES OF AMERICA, acting by and through the Secretary of
Commerce (the "Payee"), at the office of the Financial Services Division,
National Marine Fisheries Service, National Oceanic and Atmospheric
Administration, Silver Spring, Maryland, or at the Payee's option, at such other
place as may be designated from time to time by Payee, the principal amount of
Six Hundred Twenty-one Thousand Six Hundred Twenty Dollars ($621,620.00) with
interest on the unpaid principal computed from the date hereof at the rate of
six and sixty-three one-hundredths percent (6.63%) per year, payment to be made
in installments as follows:

     Sixteen Thousand and Twenty-two Dollars ($16,022.00), including principal
     and interest quarterly, with the balance of principal and interest due on
     November 22, 2008. The first quarterly payment shall be due three months
     from the date of this Note and each quarterly payment thereafter shall be
     due on the date of the month that the first quarterly payment is due
     hereunder.

     This Note is given (1) in consideration of, pursuant to the provisions of
Title XI of the Merchant Marine Act, 1936, as amended, the guaranteeing of
payment of the unpaid interest on and the unpaid balance of the principal of a
certain promissory note (the "New Guaranteed Note") issued by the Payor to Bear,
Stearns Securities Corp., on the date hereof relating to the Payor's vessel,
TEXAS, Official Number 270533 (the "Vessel"), and (2) to secure payment by the
Payor to the Payee of any amount that the Secretary may be required to pay to
the holder of the New Guaranteed Note.

     The terms "Note" and "Mortgage" as referred to in the Note shall include
Amendments No. 1 to each.

     IN WITNESS WHEREOF, the Payor has executed this Amendment No. 1 to the Note
this 31st day of March, 1993.

                                     Zapata Haynie Corporation

                                     By:
                                        ----------------------------------
                                        Vice President and Secretary






<PAGE>





<PAGE>


Case No. OG-G-996

                                 AMENDMENT NO. 1
                                       TO
                          FIRST PREFERRED SHIP MORTGAGE
                                     TO THE
                            UNITED STATES OF AMERICA

     THIS AMENDMENT NO. 1 effective the 31st day of March, 1993, to First
Preferred Ship Mortgage dated November 22, 1988, by Zapata Haynie Corporation, a
Virginia corporation, 1514 Martens Lane, Hammond, Louisiana 70404, owning 100%
(the "Mortgagor"), to the United States of America, acting by and through the
Secretary of Commerce, NOAA, National Marine Fisheries Service, Southeast
Region, 9721 Executive Center Drive North, St. Petersburg, Florida 33702 (the
"Mortgagee"),

WITNESSETH:

     WHEREAS, the Mortgagor is the sole owner of the oil screw vessel, TIGER
SHOAL, Official Number 538363, of about 194 gross tons and 131 net tons (the
"Vessel"),

     WHEREAS, the Vessel is subject to a First Preferred Ship Mortgage (as it
may be amended or supplemented, the "Mortgage") in favor of the Mortgagee in the
original principal amount of $738,927.00, evidenced by a Promissory Note to the
United States of America (the "Note") in that same amount and attached thereto
as Exhibit 1, and said Mortgage was duly recorded in the Vessel Documentation
Office of the U.S. Coast Guard, Port of New Orleans, Louisiana, at 12:20 p.m.,
on November 22, 1988, in Book PM-212, Inst. No. 40,

     WHEREAS, said Mortgage was supplemented by Supplement No. 1 to First
Preferred Ship Mortgage dated July 3, 1989, and duly recorded in the Office of
Documentation, U.S. Coast Guard, Marine Inspection, Port of New Orleans,
Louisiana, at 12:30 p.m., on July 17, 1989, in Book PM-217, Inst No. 91,

     WHEREAS, the Mortgagor, in consideration of the issuance of a certain
Guarantee by the Mortgagee pursuant to Title XI of the Merchant Marine Act,
1936, as amended ("Title XI"), guaranteeing the payment of the unpaid interest
on and the unpaid balance of the principal of a certain promissory note dated
the date hereof, executed and delivered by the Mortgagor in the principal amount
of $684,170.00 (the "New Guaranteed Note"), the Guaranteed Note as defined in
the Note having been paid in full, has executed and delivered to the Mortgagee
its Amendment No. 1 to the Note, a copy of which is attached hereto as Exhibit 2
("Amendment No. 1 to the Note"), and has agreed to execute and deliver this
Amendment No. 1 to the Mortgage for the purpose of securing the payment of the
principal of and interest on the Note, as amended, in accordance with its terms
and the terms of the Mortgage, as amended.

     WHEREAS, it is the desire of the Mortgagor to amend the Mortgage and the
terms of the Note which have been filed with the Mortgage as Exhibit 1.

     NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby




<PAGE>


<PAGE>


                                       2


acknowledged, the Mortgagor and Mortgagee agree to amend said Mortgage as
follows:

       1. To amend the amount of the Mortgage to Six Hundred Eighty-four
Thousand One Hundred Seventy Dollars ($684,170.00).

       2. In Article I, a new Section 20 is added which reads in its entirety as
follows:

          "Section 20. Should a limited fisheries access system be initiated at
          some future date under which the Mortgagor is granted a transferable
          fishery conservation and management allocation (including, but not
          limited to, allocations, permits quotas, licenses, cage tags, or any
          other fisheries access restriction or right [however characterized] of
          whatsoever nature) affecting, necessary for, or in any other way
          (however characterized) associated with any of the property included
          in or subject to this Mortgage or any other security document
          associated with this transaction, the Mortgagor shall grant to the
          Mortgagee a full senior security interest in such allocation by
          whatsoever means deemed by the Mortgagee (in its sole discretion) to
          be appropriate (including, but not limited to, the Mortgagor's
          execution of security agreements and the filing of financing
          statements under the U.C.C.). Further, if the Mortgagor fails to do
          so, the Mortgagor agrees that the Mortgagee may (in its sole
          discretion) use, for the purpose of executing, delivering, and
          otherwise perfecting whatever documents may be required to perfect the
          grant to the Mortgagee of such a full security interest in such
          fisheries conservation and management allocation, the attorney-in-fact
          authority conferred upon the Mortgagee by this Mortgage."

       3. Article II: Section 1(g) is to be deleted and substituted in its
entirety as follows:

          "(g) default shall be made by the Mortgagor 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 or the Note, or any other covenant in any other document
          which has been executed by the Mortgagor in favor of the Mortgagee,
          and such default shall continue for fifteen (15) days."

       4. In Article VI, add the following sentences:

          "Overdue guarantee fees under any New Guaranteed Note shall, beginning
          with the first day such guarantee fees are due but unpaid, be added to
          the principal of the Note corresponding with such New Guaranteed Note,
          earn interest at the same rate as specified in the Note for overdue
          principal, and be secured by this Mortgage or any other security
          document associated with this transaction. The foregoing shall not be
          deemed to have waived any of the Mortgagee's rights under this
          Mortgage or any other security document associated with this
          transaction and such overdue




<PAGE>


<PAGE>


                                       3


          guarantee fees shall remain due and payable on their originally
          scheduled date."

       5. All references in the Mortgage to the "Note" shall be deemed to be
references to the Note as amended by Amendment No. 1 to the Note.

       6. For the purposes of this Amendment No. 1 to the Mortgage, the total
amount is Six Hundred Eighty-four Thousand One Hundred Seventy Dollars
($684,170.00) and interest and performance of mortgage covenants; and the
discharge amount is the same as the amended amount.

       IN WITNESS WHEREOF, the Mortgagor has executed this Amendment No. 1 to
the Mortgage this 31st day of March, 1993.


                                  Zapata Haynie Corporation


                                  By:
                                     -------------------------------------
                                      Vice President and Secretary

       IN WITNESS WHEREOF, the Mortgagee has executed this Amendment No. 1 to
the Mortgage this 1st day of April, 1993.


                                  UNITED STATES OF AMERICA
                                  Secretary of Commerce
                                  National Oceanic and Atmospheric Administrator

                                  By:
                                     -------------------------------------
                                     Chief, Financial Services Branch
                                     Southeast Region
                                     National Marine Fisheries Service




<PAGE>


<PAGE>


                                       4



                                 ACKNOWLEDGMENT



DISTRICT OF COLUMBIA         )
                             )ss
CITY OF WASHINGTON           )


       On the 31st day of March, 1993, before me personally appeared Kent R.
Stephenson, to me known, who being by me duly sworn, did depose and say that he
is the Vice President and Secretary of Zapata Haynie Corporation, the
corporation described in and which executed the foregoing Amendment No. 1 to the
Mortgage; and that he signed his name to said Amendment No. 1 to the Mortgage by
like order, and the said Kent R. Stephenson acknowledged to me that he executed
said Amendment No. 1 to the Mortgage as the Vice President 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 Vice President and Secretary, for the uses
and purposes therein expressed.


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



                                         My commission expires
                                                              --------------




<PAGE>


<PAGE>


                                       5



                                 ACKNOWLEDGMENT



STATE OF FLORIDA            )
                            )ss
COUNTY OF PINELLAS          )


       The foregoing instrument was acknowledged before me this 1st day of
April, 1993, by Thomas S. Allen, who is the duly authorized representative of
the Secretary of Commerce of the United States of America, and that he executed
the foregoing instrument as such representative of the Secretary of Commerce
pursuant to the authority vested in him by the laws of the United States. He is
personally known to me and did not take an oath.


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



                                         My commission expires
                                                              --------------





<PAGE>





<PAGE>

________________________________________________________________________________


                               SUPPLEMENT NUMBER 5

                           Dated as of March 31, 1993

                                       to

                         FIRST PREFERRED FLEET MORTGAGE

                             Dated December 15, 1987

                                     between

                            ZAPATA HAYNIE CORPORATION

                                       and

                                  CHEMICAL BANK
                           (as successor by merger to
                      MANUFACTURERS HANOVER TRUST COMPANY),
                                   as Trustee

- ------------------------------------------------------------------------------

Eight Coast Guard District,                    Eighth Coast Guard District 
Port of New Orleans, La.                       port of New Orleans         
                                               April 13, 1993              
Received for record on April 13,               Certified to be a true copy 
1993 at 11:00 AM                               of the original.            

and recorded in Book No. PM-242,
Ins. 353            




           ______________________________       ________________________________
           Documentation Officer                Documentation Officer





<PAGE>


<PAGE>



         SUPPLEMENT NUMBER 5, dated as of March 31, 1993 (this "Supplement"), to
FIRST PREFERRED FLEET MORTGAGE made and dated December 15, 1987, between ZAPATA
HAYNIE CORPORATION, a Virginia corporation (the "Mortgagor"), and CHEMICAL BANK
(as successor by merger to MANUFACTURERS HANOVER TRUST COMPANY, Trustee, as
mortgagee (the "trustee").

                              W I T N E S S E T H:

         WHEREAS:

         The Mortgagor, as sole owner of the Vessels (as defined herein), has
heretofore executed and delivered to the Trustee a First Preferred Fleet
Mortgage dated December 15, 1987 (the "Original Mortgage"), pursuant to which
the Mortgagor mortgaged to the Trustee the vessels identified in Schedule I to
the Original Mortgage (the "Original Vessels") to secure the Obligations (as
defined in the Original Mortgage), the Original Mortgage having been recorded on
December 15, 1987, at 9:15 a.m. in the Office of the Officer in Charge, Marine
Inspection, United States Coast Guard, at the Port of New Orleans (the "Coast
Guard Office"), in Book PM-205, Instrument 250; and the Original Mortgage was
amended and supplemented by Supplement Number 1 dated November 22, 1988
("Supplement Number 1"), pursuant to which an additional vessel was subjected to
the lien of the Original Mortgage, as so amended and supplemented (said
additional vessel being herein called the "Supplement Number 1 Vessel"), said
Supplement Number 1 having been recorded on November 22, 1988, at 10:35 a.m. in
the Coast Guard Office, in Book PB-212, Instrument 37; and the Original Mortgage
was further amended and supplemented by Supplement Number 2 dated July 3, 1989
("Supplement Number 2"), pursuant to which certain mortgage covenants were
amended, said Supplement Number 2 having been recorded on July 17, 1989, at
12:40 p.m. in the Coast Guard Office, in Book PM-217, Instrument 96; and the
Original Mortgage was further amended and supplemented by Supplement Number 3
dated July 18, 1989 ("Supplement Number 3"), pursuant to which additional
vessels were subjected to the lien of the Original Mortgage, as so amended and
supplemented (said additional vessels being herein called the "Supplement Number
3 Vessels"), said Supplement Number 3 having been recorded on July 18, 1989, at
1:35 p.m. in the Coast Guard Office, in Book PM-217, Instrument 118; and the
Original Mortgage was further amended and supplemented by Supplement Number 4
dated December 21, 1990 ("Supplement Number 4"), pursuant to which, among other
things, additional vessels were subjected to, the lien of the Original Mortgage,
as so amended and supplemented (said vessels and the Original Vessels, the
Supplement Number 1 Vessel and the Supplement Number 3 Vessels, less any deleted
vessels, being the "Vessels," as set forth in Exhibit A hereto), said Supplement
Number 4 having been recorded on January 10, 1991, at 8:00 a.m. in the Coast
Guard Office, in Book PM-227, Instrument 12 (said mortgage, as heretofore
amended, the "Existing Mortgage", and as further supplemented hereby and has the
same may hereafter be amended or supplemented, being herein called the
"Mortgage");

         Supplement Number 2 subordinated the lien of the Mortgage to the lien
of the United States of America, acting by and through the Secretary of Commerce
(the "First Mortgagee"), under a separate Preferred Ship Mortgage (individually,
a "First Mortgage," and collectively, the "First Mortgages") on each vessel
listed in Schedule II to the Mortgage (individually, a "NOAA





<PAGE>


<PAGE>


                                      - 2 -

Vessel," and, collectively, the "NOAA Vessels"), but excluding all other vessels
subject to the Mortgage;

         The Mortgagor is refinancing the NOAA Vessels listed in Schedule II to
the Existing Mortgage and desires to subordinate the Mortgage to the First
Mortgages on such NOAA Vessels, as amended as of the date hereof;

         The execution and delivery of this instrument has been duly authorized
and all conditions and requirements necessary to make this instrument a legal,
valid and binding agreement, to effect the modifications of the Mortgage as
provided herein and to confirm, affirm, reaffirm, and continue the Mortgage as
supplemented and amended by this instrument, as a valid, binding, preferred
fleet mortgage to secure payment of the Obligations (subject to the limitation
of the liability of the Mortgagor set forth in the Guarantee [as defined in the
Mortgage] have been duly performed and complied with;

         It was a condition of the agreement by the First Mortgagee to the
refinancing of the NOAA Vessels that the Trustee and the Mortgagor enter into
this Supplement to subordinate the lien of the Mortgage on the NOAA Vessels to
the lien of the respective First Mortgages, as amended;

         NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt of which is hereby acknowledged, this Supplement
Witnesseth:

                                  ARTICLE FIRST

         The Existing Mortgage is hereby amended and supplemented as follows:

         Section 1. All references in the Existing Mortgage to a "First
Mortgage" or to "First Mortgages" shall be deemed to be references to such
preferred ship mortgage or mortgages, as the case may be, on the NOAA Vessels in
favor of the First Mortgagee, as amended as of the date hereof.

         Section 2. All references in the Existing Mortgage to "Senior
Indebtedness" shall be deemed to be references to certain obligations of the
Mortgagor to the First Mortgagee in connection with the guarantees (the "New
NOAA Guarantees") given, as of the date hereof, by the First Mortgagee to
certain purchasers of notes of the Mortgagor.

         Section 3. All references in the Existing Mortgage to "NOAA Guarantees"
shall be deemed to be references to the New NOAA Guarantees.





<PAGE>


<PAGE>


                                      - 3 -

                                 ARTICLE SECOND

         Section 1. Except as otherwise expressly provided herein, all of the
covenants and agreements on the part of the Mortgagor which are set forth, and
all the rights, privileges, powers and immunities of the Trustee which are
provided for, in the Existing Mortgage shall continue to be and shall remain in
full force and effect.

         Section 2. For the purpose of the Mortgage and this Supplement, the
addresses of the parties hereto are, as of the date hereof, and Section 5.7 of
the Existing Mortgage is hereby amended accordingly:

                  Trustee:          Chemical Bank
                                    270 Park Avenue
                                    New York, New York 10017
                                    Attention: Timothy J. Storms
                                    Telex: 420120
                                    Answerback: CBCUI
                                    Telefax: (212) 661-8396
                                    Telephone Confirmation: (212) 270-4696

                  Mortgagor:        Zapata Haynie Corporation

                                    For Deliveries by Hand:
                                    1514 Martens Drive
                                    Hammond, Louisiana 70404

                                    For Deliveries by Mail:
                                    Post Office Box 2868
                                    Hammond, Louisiana 70404
                                    Attention: President

                                    With a Copy to:
                                    Counsel
                                    (as the same address)

                                    Telex: 469-695
                                    Answerback: ZAPHAY-CI
                                    Telefax: (504) 345-9393
                                    Telephone Confirmation: (504) 345-2035





<PAGE>


<PAGE>


                                      - 4 -

         Section 3. Except as expressly amended by this Supplement, the Existing
Mortgage is in all respects ratified and confirmed and all the terms, provisions
and conditions thereof shall be and remain in full force and effect.

         Section 4. Any term used herein which is defined in the Existing
Mortgage or by reference therein to another instrument shall have the same
meaning defined in the Existing Mortgage or such other instrument.

         Section 5. This instrument may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original.

         Section 6. The Trustee expressly does not waive the preferred status of
the Mortgage, and any provision of this Supplement which would otherwise
constitute such a waiver shall to such extent be of no force and effect.

         Section 7. THIS SUPPLEMENT, AND ALL OF THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER, AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, SHALL BE
GOVERNED BY THE FEDERAL MARITIME LAWS OF THE UNITED STATES OF AMERICA AND, ONLY
TO THE EXTENT NOT ADDRESSED THEREBY, BY THE LAWS OF THE STATE OF NEW YORK.

         IN WITNESS WHEREOF, this instrument has been executed as of the day and
year first above written.

                                        ZAPATA HAYNIE CORPORATION
                                       
                                        By: _______________________________
                                            Title:
                                       
                                        CHEMICAL BANK, Trustee
                                       
                                        By: _______________________________
                                            Title:




<PAGE>


<PAGE>



                                 ACKNOWLEDGMENT

DISTRICT OF COLUMBIA   )
                       )  ss:
CITY OF WASHINGTON     )

         I, the undersigned, a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that Kent Stephenson, a Vice President of ZAPATA
HAYNIE CORPORATION, the corporation named as mortgagor in the foregoing
instrument, personally appeared before me in said jurisdiction, the aforesaid
officer, being personally well known to me as (or proved by the oath of credible
witnesses to be) the person who executed the foregoing instrument, and
acknowledged the same to be the act and deed of the said corporation, and that
he delivered the same as such.

         Given under my hand and seal this 31st day of March, 1993.

                                                 _______________________________






<PAGE>


<PAGE>



                                 ACKNOWLEDGMENT

STATE OF NEW YORK     )
                      )  ss:
COUNTY OF NEW YORK    )

         On this 18 day of March, 1993, before me personally appeared Kathryn A.
Duncan to me known, who, being by me duly sworn, did depose and say that he/she
resides at 18A Hollow Wood Lane, Greenwich, CT, that he/she is a Vice President
of CHEMICAL BANK, the banking corporation described in and which executed the
foregoing instrument; and that he/she signed his/her name thereto by order of
the Board of Directors of said banking corporation.

                                             ______________________________
                                                      Notary Public





<PAGE>


<PAGE>



                                                                    Exhibit A to
                                                                Supplement No. 5

                                                                      SCHEDULE I
                                                                              To

                                                        Preferred Fleet Mortgage

                                                                     Page 1 of 4

                   VESSEL SUBJECT TO PREFERRED FLEET MORTGAGE
           IN FAVOR OF MANUFACTURERS HANOVER TRUST COMPANY, AS TRUSTEE

Port of Documentation of all Vessels:  New Orleans, Louisiana

Owner of all Vessels:  Zapata Haynie Corporation



<TABLE>
<CAPTION>

                                        Approximate    Approximate                     Location of Shipyard
                          Official      Gross          Net           Year of           at which Vessel
    Name                  Number        Tonnage        Tonnage       Construction      Was Constructed
    ----                  ------        -------        -------       ------------      ---------------
<S>                       <C>           <C>            <C>           <C>               <C>
TIDELANDS                 501955        572            304           1965              Port George Island, FL
CARL BURTON               298971        520            353           1965              Port Arthur, Texas
WILLARD P. LEBEOUT        298972        555            377           1965              Port Arthur, Texas
GALVESTON BAY             508776        537            366           1967              Port Arthur, Texas
RARATARIA BAY             508201        537            366           1967              Port Arthur, Texas
TIGER POINT               508606        537            366           1967              Port Arthur, Texas
ISLE DERNIERE             618126        530            367           1980              Mermentau, Louisiana
TERREBONNE BAY            508200        537            366           1967              Port Arthur, Texas
</TABLE>





<PAGE>


<PAGE>


                                                                     Page 3 of 4

<TABLE>
<CAPTION>
                                        Approximate     Approximate                     Location of Shipyard
                            Official    Gross           Net           Year of           at which Vessel
       Name                 Number      Tonnage         Tonnage       Construction      Was Constructed
       ----                 ------      -------         -------       ------------      ---------------
<S>                         <C>         <C>             <C>           <C>               <C>                      
ALLEN W. HAYNIE             513004      524             356           1968              Port Deposit, Maryland
RACCOON POINT               532143      538             366           1971              Port Arthur, Texas
MARSH ISLAND                532142      538             366           1971              Port Arthur, Texas
JOHN S. DEMPSTER, JR.       547685      542             366           1944              Yonkers, New York
OYSTER BAYOU                531634      517             352           1971              Mermentau, Louisiana
TIGER SHOAL                 538363      194             131           1972              Port Arthur, Texas
GRAND ISLE                  541024      250             170           1972              Moss Point, MS
(EX. BENGAL SEAHORSE)                                                                  
GULF SHORE                  539469      188             128           1972              Moss Point, MS
(EX. TASMAN SEAHORSE)                                                                  
TEXAS                       270533      269             183           1955              Port Arthur, Texas
CHESAPEAKE BAY              541069      195             133           1972              Port Arthur, Texas
LOUISIANA                   270596      295             201           1955              Port Arthur, Texas
FROSTY MORN                 276926      648             344           1958              Jacksonville, Florida
ATCHAFALAYA BAY             539603      533             370           1972              Mermentau, Louisiana
TIMBALIER BAY               539206      533             370           1972              Mermentau, Louisiana
</TABLE>








<PAGE>





<PAGE>

THIS AMENDMENT TO GUARANTY DEED OF TRUST IS SUPPLEMENTAL TO GUARANTY DEED OF
TRUST DATED AS OF JULY 18, 1989 AND RECORDED AMONG THE LAND RECORDS OF
NORTHUMBERLAND COUNTY, VIRGINIA, ON JULY 18, 1989, IN DEED BOOK 298 AT PAGE 80,
AND ADDS NO NEW MONEY TO THE INDEBTEDNESS SECURED THEREBY.


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                    AMENDMENT NO. 1 TO GUARANTY DEED OF TRUST

                           Dated as of March 31, 1993

                                     Made By

                           Zapata Haynie Corporation,
                             a Virginia corporation

                                       to

                             Michael T. Bradshaw of
                        Fairfax County, Virginia, Trustee

                                       and

                              Edward E. Zughaib of
                        Fairfax County, Virginia, Trustee

                               for the Benefit of

                          the United States of America

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------




<PAGE>


<PAGE>


                    AMENDMENT NO. 1 TO GUARANTY DEED OF TRUST

THE COMMONWEALTH OF VIRGINIA        )    
                                    )  ss:    KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF NORTHUMBERLAND            )    

        WHEREAS, Delta Life Securities, Inc. (the "Lender") has made a loan or
loans (the "Loan") to or for the benefit of Zapata Haynie Corporation (the
"Grantor"), in the aggregate original principal amount of Four Million Six
Hundred Seventy-five Thousand Dollars ($4,675,000); and

        WHEREAS, the Loan was evidenced by five United States Guaranteed Notes
dated July 18, 1989, made by the Grantor to the order of the Lender, and
subsequently assigned to Delta Life & Annuity Company, in the same aggregate
original principal amount as the Loan (the "Guaranteed Notes"); and

        WHEREAS, the United States of America, acting through the National
Marine Fisheries Service of the National Oceanic and Atmospheric Administration,
United States Department of Commerce (the "Beneficiary"), has guaranteed
repayment of the Guaranteed Notes pursuant to five Guarantees of the United
States of America dated July 18, 1989, made by the Beneficiary in favor of the
Lender (the "Guarantees"); and

        WHEREAS, as a condition to the issuance of the Guarantees, the Grantor
agreed to reimburse the Beneficiary for all sums paid by the Beneficiary to the
Lender under the Guarantees, which obligations are evidenced by five Promissory
Notes to the United States of America dated July 18, 1989, made by the Grantor
to the order of Beneficiary in the same aggregate original principal amount as
the Guaranteed Notes (the "Notes"); and

        WHEREAS, as an additional condition to the issuance of the Guarantees,
the Grantor agreed to secure its obligation to repay the Notes by delivering a
Guaranty Deed of Trust dated as of July 18, 1989 and recorded among the Land
Records of Northumberland County, Virginia, on July 18, 1989, in Deed Book 298
at Page 80 (the "Deed of Trust"), pursuant to which the Guarantor conveyed the
property described on Exhibit A attached thereto in trust to the Trustees (as
defined therein) for the benefit of the Beneficiary; and

        WHEREAS, the Beneficiary has agreed to permit Grantor to refinance the
Loan by issuing five new United States Guaranteed Notes to each of Delta Life &
Annuity Company and Bear, Stearns Securities Corp. (together the "New Lenders"),
in the same aggregate amount as the outstanding balance of the Loan (the "New
Guaranteed Notes") and to use the proceeds thereof to pay off the Guaranteed
Notes; and





<PAGE>


<PAGE>


                                       -2-

        WHEREAS, the Notes have been amended on the date hereof to reflect the
guarantee by the Beneficiary to the New Lenders of the New Guaranteed Notes; and

        WHEREAS, the parties hereto desire that the Deed of Trust, as hereby
amended, secure the Notes, as so amended.

        NOW, THEREFORE, in consideration of the premises and for and in
consideration of the sum of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

       1. All references in the Deed of Trust to "Notes" shall be deemed to be
references to the Notes as amended on the date hereof.

        2. The Grantor further agrees to be bound by the following covenants:

               2.1 Should a limited fisheries access system be initiated at some
future date under which the Grantor is granted a transferable fishery
conservation and management allocation (including, but not limited to,
allocations, permits, quotas, licenses, cage tags, or any other fisheries access
restriction of right [however characterized] of whatsoever nature) affecting,
necessary for, or in any other way (however characterized) associated with any
of the property included in or subject to the Deed of Trust, the Grantor agrees
that it shall grant to the Beneficiary a full senior security interest in such
allocation by whatsoever means deemed by the Beneficiary (in its sole
discretion) to be appropriate (including, but not limited to, the Grantor's
execution of security agreements and the filing of financing statements under
the U.C.C.). Further, in the event that the Grantor fails to do so, the Grantor
hereby irrevocably appoints the Mortgagee its true and lawful attorney in fact
for the purpose of executing, delivering and otherwise perfecting whatever
documents may be required to perfect the grant to the Beneficiary of such a full
security interest in such fisheries conservation and management allocation.

               2.2 Overdue guarantee fees under any New Guaranteed Note shall,
beginning with the first day such guarantee fees are due but unpaid, be added to
the principal of the Note corresponding with such New Guaranteed Note, earn
interest at the same rate as specified in the Note for overdue principal, and be
secured by the Deed of Trust. This shall not be deemed to have waived any of
Beneficiary's rights under the Deed of Trust and such overdue guarantee fees
shall remain due and payable on their originally scheduled date.

        Except as expressly amended by this Amendment No. 1, the Deed of Trust
is in all respects ratified and confirmed and all the terms, provisions and
conditions thereof shall be and remain in full force and effect.

        This Amendment No. 1 to the Deed of Trust is governed by and construed
in accordance with the laws of the Commonwealth of Virginia.





<PAGE>


<PAGE>


                                       -3-

        This Amendment No. 1 to the Deed of Trust is exempt from recordation
taxes pursuant to Section 58.1-809 of the Code of Virginia, as amended.

        At the direction of the Beneficiary, the Trustees join in the execution
of this Amendment No. 1 to the Deed of Trust to evidence their consent to the
foregoing amendment.

        IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 to Guaranty Deed of Trust as of the 31st day of March, 1993.

                                             ZAPATA HAYNIE CORPORATION,
                                              a Virginia corporation
                                                                             
                                             By:  ------------------------------
                                                          Vice President
                                                                
                                             -----------------------------------
                                             Michael T. Bradshaw, Trustee
                                                                          
                                             -----------------------------------
                                             Edward E. Zughaib, Trustee   
                                               




<PAGE>


<PAGE>



DISTRICT OF COLUMBIA                )
                                    )  ss:
CITY OF WASHINGTON                  )

        I, Victoria K. Wolf, a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that Kent Stephenson, a Vice President of Zapata
Haynie Corporation, the corporate grantor in the foregoing Amendment Number 1 to
Guaranty Deed of Trust, personally appeared before me in said jurisdiction, the
aforesaid officer, being personally well known to me as (or proved by the oath
of credible witnesses to be) the person who executed said instrument, and
acknowledged said Amendment No. 1 to Guaranty Deed of Trust to be the act and
deed of said corporation and that he delivered the same as such.

                                            -------------------------------
                                                    NOTARY PUBLIC




<PAGE>


<PAGE>


COMMONWEALTH OF VIRGINIA                    )
                                            )  ss:
COUNTY OF FAIRFAX                           )

        I,                    , a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that MICHAEL T. BRADSHAW, a Trustee in the
foregoing Amendment Number 1 to Guaranty Deed of Trust, personally appeared
before me in said jurisdiction, the aforesaid trustee, being personally well
known to me as (or proved by the oath of credible witnesses to be) the person
who executed said instrument, and acknowledged said Amendment No. 1 to Guaranty
Deed of Trust to be the act and deed, and that he executed said Amendment No. 1
to Guaranty Deed of Trust for the purposes therein contained.

                                            -------------------------------
                                                   NOTARY PUBLIC





<PAGE>


<PAGE>


COMMONWEALTH OF VIRGINIA                    )
                                            )  ss:
COUNTY OF FAIRFAX                           )

        I,                    , a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that EDWARD E. ZUGHAIB, a Trustee in the foregoing
Amendment Number 1 to Guaranty Deed of Trust, personally appeared before me in
said jurisdiction, the aforesaid trustee, being personally well known to me as
(or proved by the oath of credible witnesses to be) the person who executed said
instrument, and acknowledged said Amendment No. 1 to Guaranty Deed of Trust to
be the act and deed, and that he executed said Amendment No. 1 to Guaranty Deed
of Trust for the purposes therein contained.

                                            -------------------------------
                                                   NOTARY PUBLIC





<PAGE>





<PAGE>


================================================================================


                               SUPPLEMENT NUMBER 2


                           Dated as of March 31, 1993



                                       to



                               SECURITY AGREEMENT

                             Dated November 22, 1988


                                       by


                            ZAPATA HAYNIE CORPORATION


                                   in favor of

                          THE UNITED STATES OF AMERICA


================================================================================




<PAGE>


<PAGE>


                    SUPPLEMENT NUMBER 2 TO SECURITY AGREEMENT

     SUPPLEMENT NUMBER 2, dated as of March 31, 1993 (this "Supplement"), to
Security Agreement (the "Original Security Agreement") dated November 22, 1988,
by Zapata Haynie Corporation, a Virginia corporation (the "Debtor"), in favor of
the United States of America, acting by and through the Secretary of Commerce,
National Marine Fisheries Service, National Oceanic and Atmospheric
Administration (the "Secured Party").

     WHEREAS, the Debtor has heretofore executed and delivered to the Secured
Party the Original Security Agreement to secure payment of certain promissory
notes dated November 22, 1988 in the aggregate principal amount of $4,279,838
(the "First Notes");

     WHEREAS, the Original Security Agreement was amended and supplemented by
Supplement Number 1 dated July 18, 1989 ("Supplement Number 1") pursuant to
which the Debtor executed and delivered to the Secured Party promissory notes
dated July 18, 1989 in the aggregate principal amount of $4,675,000 (the "Second
Notes");

     WHEREAS, as security for the payment of the First Notes and the Second
Notes, the Debtor granted a security interest in certain steel hull boats purse
boats described in the Original Security Agreement and in Supplement Number 1
(collectively, the Original Security Agreement and Supplement Number 1 are
referred to as the "Security Agreement");

     WHEREAS, the First Notes and the Second Notes were delivered to the Secured
Party in connection with the Guarantee by the Secured Party of certain
promissory notes (the "Guaranteed Notes") issued by the Debtor to Delta Life
Securities, Inc. and subsequently assigned to Delta Life & Annuity Company.

     WHEREAS, the Secured Party has agreed to permit the Debtor to refinance the
Guaranteed Notes by issuing ten new United States Guaranteed Notes: five notes
to Delta Life & Annuity Company and five notes to Bear, Stearns Securities
Corp., in the same aggregate outstanding principal balance of the Guaranteed
Notes (the "New Guaranteed Notes") and to use the proceeds thereof to redeem the
Guaranteed Notes;

     WHEREAS, the First Notes and the Second Notes have been amended on the date
hereof (the "Amended Notes") to reflect the New Guaranteed Notes.

     NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt of which is hereby acknowledged, the Secured
Party and Debtor hereby agree as follows:

     The Security Agreement is hereby amended and supplemented as follows:

     1. All references in the Security Agreement to "Notes" shall be deemed
references to the Amended Notes.





<PAGE>


<PAGE>


                                      - 2 -

    2. Except as provided herein, the grant by Debtor of a security interest
in the certain steel hull purse boats described in the Security Agreement, as
amended hereby, is in full force and effect and the Secured Party's interest in
the collateral is in no way affected by this Supplement.

     3. The Debtor, as additional security for each of the Amended Notes,
agrees to be bound by the following covenants:

        3.1 Should a limited fisheries access system be initiated at some
future date under which the Debtor is granted a transferable fishery
conservation and management allocation (including, but not limited to,
allocations, permits, quotas, licenses, cage tags, or any other fisheries access
restriction or right [however characterized] of whatsoever nature) affecting,
necessary for, or in any other way (however characterized) associated with any
of the property included in or subject to the Security Agreement, the Debtor
agrees that it shall grant to Secured Party a full senior security interest in
such allocation by whatsoever means deemed by the Secured Party (in its sole
discretion) to be appropriate (including, but not limited to, the Debtor's
execution of security agreements and the filing of financing statements under
the U.C.C.). Further, in the event that the Debtor fails to do so, the Debtor
hereby irrevocably appoints the Secured Party its true and lawful attorney in
fact for the purpose of executing, delivering and otherwise perfecting whatever
documents may be required to perfect the grant to the Secured Party of such a
full security interest in such fisheries conservation and management allocation.

        3.2 Overdue guarantee fees under any New Guaranteed Note shall,
beginning with the first day such guarantee fees are due but unpaid, be added to
the principal of the Note corresponding with such New Guaranteed Note, earn
interest at the same rate as specified in the Note for overdue principal, and be
secured by the Security Agreement. This shall not be deemed to have waived any
of the Secured Party's rights under the Security Agreement and such overdue
guarantee fees shall remain due and payable on their originally scheduled date.

     4. Schedule A to the Security Agreement is hereby amended, as attached
hereto, to revise the certificate numbers of certain steel hull purse boats, to
consolidate all boats affected by the Security Agreement onto one Schedule and
to reflect the deletion from the coverage of the Security Agreement of the steel
hull purse boats formerly located in Virginia but moved to Louisiana and to be
covered by the Collateral Mortgage, Collateral Chattel Mortgage and Collateral
Assignment of Leases dated November 18, 1988, as amended.

     5. This Supplement is executed as and shall constitute an instrument
supplemental to and incorporated into the Security Agreement. The Security
Agreement, as amended and supplemented by this Supplement, is in all respects
ratified and confirmed and remains in full force and effect.





<PAGE>


<PAGE>


                                      - 3 -

     IN WITNESS WHEREOF, the Debtor and Secured Party have caused this
Supplement to be duly executed as of the day and year first above written.


                                     ZAPATA HAYNIE CORPORATION

                                     By:
                                            ---------------------------------
                                            Title:



                                     THE UNITED STATES OF AMERICA,
                                     acting by and through the
                                     Secretary of Commerce,
                                     Secured Party

                                     By:
                                            ---------------------------------
                                            Title:





<PAGE>


<PAGE>


                         SCHEDULE A TO SUPPLEMENT NO. 2
                              TO SECURITY AGREEMENT



                                             Hull                Location
State of            Certificate          Identification          When Not
Registry               Number                Number               In Use
- --------            -----------          --------------          --------
Mississippi         MI-7451-AK           MIZ00457C585                1
Mississippi         MI-7328-AK           MIZ00459C585                1
Mississippi         MI-8616-AL           MIZ22707A160                1
Mississippi         MI-8727-AL           MIZ22706A160                1








- ------------------------------------------------------------------------------

(1)  Zapata Haynie Corporation, Moss Point Plant, 5735 Elder Ferry Road,
     Escatawpa, Mississippi 39552






<PAGE>





<PAGE>

                INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS

     THIS INDEMNITY AGREEMENT (this "Agreement") is made and given as of the
31st day of March 1993, by Zapata Haynie Corporation, a Virginia corporation
("Zapata"), to and in favor of the United States of America, acting by and
through the Secretary of Commerce (the "Secretary"), with reference to the
recitals hereinafter set forth.

                                R E C I T A L S:

     A. Zapata is the owner of certain real property located in Vermilion
Parish, Louisiana, more particularly described in Exhibit "A" attached hereto
and incorporated herein by this reference (the "Land"; the Land, together with
all improvements now or hereafter located thereon being referred to herein,
collectively, the "Property").

     B. The Secretary has guaranteed certain obligation of Zapata (the
"Guarantees") in consideration for which Zapata has executed and delivered to
the Secretary certain promissory notes, as amended, payable to the Secretary
(the "Notes"), which Notes are secured by, among other things, that certain
Collateral Mortgage, Collateral Chattel Mortgage and Collateral Assignment of
Leases dated November 18, 1988, as amended, respecting the Property (the
"Mortgage").

     C. As a condition to providing the Guarantees, the Secretary requires
Zapata to provide certain indemnities concerning Hazardous Materials (as
hereinafter defined) affecting the Property.

     NOW, THEREFORE, for and in consideration of the above premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Secretary, by its acceptance of delivery hereof, and Zapata
hereby agree as follows:

     1. Definitions. The following definitions shall apply for purposes of this
Agreement:

     "Environmental Laws" shall mean any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority regulating, relating to or
imposing liability or standards of conduct concerning environmental protection
matters, including without limitation, Hazardous Materials, as now or may at any
time hereafter be in effect.

     "Governmental Authorities" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, but only to the extent that any such





<PAGE>


<PAGE>



Governmental Authority shall exercise jurisdiction over Zapata or the Secretary,
as the case may be.

     "Hazardous Materials" shall mean any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as such in
or under any Environmental Law.

     2. Covenants. So long as the Notes remain outstanding and unpaid or any
other amount is owing to the Secretary hereunder or under any other document,
Zapata shall, with respect to the Property:

     (a) Comply with, and require all tenants and subtenants, if any, to comply
with, all Environmental Laws and obtain and comply with and maintain, and
require that all such tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, registrations or permits required by
Environmental Laws, except to the extent that failure to do so could not have a
material adverse effect on the business, operations, property or financial
condition of Zapata.

     (b) Conduct and complete all investigations, studies, sampling and testing,
and 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, except to the extent that the same
are being contested in good faith by appropriate proceedings and the pendency of
such proceedings could not have a material adverse effect on the business,
operations, property or financial condition of Zapata.

     3. Indemnity. Zapata shall with respect to the Property, defend, indemnify
and hold harmless the Secretary, from and against any claims, demands,
penalties, fines, 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 Zapata of or
with any Environmental Laws applicable to the Property, 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.

     4. Environmental Matters. To the best of Zapata's knowledge (i) none of the
operations or properties of Zapata's is the subject of Federal, state or foreign
investigation evaluating whether any remedial action is needed to respond to a
release or threat of a release of any Hazardous Material into the environment;
(ii) Zapata has not received any written communication since July 18, 1989 from
a Governmental Authority that alleges that Zapata is not in compliance with any
Environmental Laws with respect to the Property, other than any written
communication in response to which Zapata took action and restored its
compliance with such Environmental Laws; (iii) Zapata has filed all notices
required to be filed under any Environmental Law with respect to the Property
indicating past or present generation, treatment, storage or disposal of a
Hazardous Material or reporting a spill or release of a Hazardous Material


                                      - 2 -




<PAGE>


<PAGE>



into the environment; and (iv) Zapata has no material contingent liability in
respect of the Property in connection with any Hazardous Material.

     5. Relationship of the Parties. The Secretary 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 Zapata, nor an "owner"
or "operator" of the Property, nor a "facility" (as such terms are defined by
applicable state and federal statutes) and the Secretary does not intend to
assume any such status; and the Secretary is not and shall not be deemed
responsible for (or a participant in) any acts, omissions or decisions of
Zapata.

     6. 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:

                  Zapata Haynie Corporation
                  1514 Martens Drive
                  Hammond, Louisiana 70401

                  United States of America
                  National Marine Fisheries Service
                  9450 Koger Boulevard
                  St. Petersburg, Florida 33702

or to such other party and at such other address within the continental United
States of America as may have theretofore been designated in writing. The date
of receipt of such notice, election or demand shall by the earliest of (i) the
date of actual receipt of such notice, election or demand; (ii) three (3) days
after the date of mailing thereof by registered or certified mail, (iii) one (1)
day after the date of mailing thereof by Express Mail, or the delivery (for
redelivery) to Federal Express or another similar service requiring a receipt,
or (iv) the date of personal delivery (or refusal upon presentation for
delivery) thereof, if applicable.

     7. 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 party against whom enforcement of the
change, waiver, discharge or termination is sought.

     8. Binding Effect. Except as herein provided, this Agreement shall be
binding upon Zapata, its successors and permitted assigns, and shall inure to
the benefit of the Secretary, and its successors and assigns. Notwithstanding
the foregoing, Zapata, without the prior written consent of the Secretary 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


                                      - 3 -




<PAGE>


<PAGE>


not limited to, performance of and compliance with the conditions hereof. Any
reference to Zapata shall include the Zapata's successors and assigns.

     9. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall in all respects be governed by, and construed and
enforced in accordance with, the laws of the State of Louisiana applicable to
contracts made and to be performed therein (excluding its choice of law
provisions).

     10. Not Secured. The obligation evidenced by this Agreement IS NOT secured
by the Mortgage.

     IN WITNESS WHEREOF, Zapata has caused this Agreement to be executed as of
the day and year first written above.

                                                ZAPATA HAYNIE CORPORATION


                                                ------------------------------
                                                Name:
                                                Title:



                                      - 4 -



<PAGE>





<PAGE>

                    UNITED STATES GUARANTEED PROMISSORY NOTE


City and State   New Orleans, Louisiana                             No. B-9703

Date  September 27, 1994                                     Case No. OG-G-862

THIS IS A PROMISSORY NOTE GUARANTEED BY THE UNITED STATES OF AMERICA (THE
"NOTE").

THIS NOTE WILL BE PAID BY   Zapata Protein (USA), Inc., P.O. Box 2868, 
Hammond Louisiana 70404 (THE "PAYOR").

THIS NOTE WILL BE PAID TO   Sun Bank of Tampa Bay
at Commercial Loans, P.O. Box 20248, Tampa, Florida 33622-0248 (THE "PAYEE").

THIS NOTE'S PRINCIPAL AMOUNT IS Seven Hundred Sixty-eight Thousand One Hundred
Eight dollars ($768,108.00) (THE "PRINCIPAL").

THIS NOTE'S INTEREST RATE IS    to be determined using the three-month (90-day)
London Interbank Offered Rate (LIBOR) plus 45 basis points (rounded up to the
nearest basis point) adjusting quarterly, with a ten percent (10.0%) interest
cap for the first ten (10) years. The interest rate for the first quarterly
payment will be determined on the day the loan is funded and will be adjusted
ninety (90) days prior to each payment due date thereafter. (THE "INTEREST
RATE).

THIS NOTE'S PAYMENT PROVISIONS ARE     that quarterly principal plus interest
payments will be due on December 27, March 27, June 27, and September 27, of
each year until eighty (80) quarterly payments are made and/or the loan is fully
amortized. (THE "PAYMENT PROVISIONS).

THIS NOTE MAY BE PREPAID        at any time without penalty.

         PAYEE HEREBY LENDS THE PRINCIPAL TO PAYOR. PAYOR HEREBY ACKNOWLEDGED
RECEIPT OF THE PRINCIPAL FROM PAYEE. FOR VALUE RECEIVED, PAYOR PROMISES TO PAY
THE PRINCIPAL TO THE ORDER OF PAYEE WITH INTEREST AT THE INTEREST RATE AND IN
ACCORDANCE WITH THE PAYMENT PROVISIONS. PAYMENT SHALL BE AT PAYEE'S ADDRESS
ABOVE UNLESS PAYEE DESIGNATES IN WRITING A DIFFERENT ADDRESS.

         INTEREST SHALL APPLY TO ALL UNPAID PRINCIPAL FROM THE DATE OF THIS
NOTE. INTEREST IS SIMPLE INTEREST. INTEREST SHALL ACCRUE ON THE BASIS OF 30-DAY
MONTHS AND 360-DAY YEARS. 

         ALL PAYMENT ON THIS NOTE SHALL FIRST BE APPLIED TO ACCRUED INTEREST.
ANY REMAINDER SHALL BE APPLIED TO THE PRINCIPAL.

         PAYEE MAY DECLARE THE FULL UNPAID AMOUNT OF THIS NOTE IMMEDIATELY DUE
AND PAYABLE AT ANY TIME PAYOR FAILS TO KEEP HIS PROMISE. THE PAYOR'S PROMISE IS
UNCONDITIONAL. PAYOR'S OBLIGATION UNDER THIS NOTE SHALL NOT BE IMPAIRED BY
PAYEE'S INDULGENCE. THIS NOTE IS THE ENTIRE CONTRACT BETWEEN PAYOR AND PAYEE.
PAYOR'S OBLIGATION IS JOINT AND SEVERAL IF MORE THAN ONE PARTY IS INVOLVED.

         THIS IS THE NOTE REFERRED TO IN THE GUARANTEE APPEARING AT THE BOTTOM
OF THIS DOCUMENT.

Attest:                                   Zapata Protein (USA), Inc.

- ------------------------------            --------------------------------

By:                                       By:
- ------------------------------            --------------------------------

Secretary                                 Vice President and Controller

- ------------------------------            --------------------------------



                    GUARANTEE OF THE UNITED STATES OF AMERICA

         THIS IS A GUARANTEE OF THE NOTE APPEARING AT THE TOP OF THIS DOCUMENT
(THE "GUARANTEE").

         THE GUARANTOR IS THE UNITED STATES OF AMERICA, ACTING BY AND THROUGH
THE SECRETARY OF COMMERCE (THE "GUARANTOR").

         THE PAYEE IS THE SAME AS IN THE NOTE.

         GUARANTOR HEREBY PLEDGES ITS FULL FAITH AND CREDIT TO PAYMENT IN FULL
OF THE NOTE. ALL UNPAID PRINCIPAL AND INTEREST (INCLUDING INTEREST THROUGH THE
DATE OF GUARANTOR'S PAYMENT) IS HEREBY GUARANTEED. THE VALIDITY OF THIS
GUARANTEE IS INCONTESTABLE AS TO ANY LAWFUL HOLDER OF THE NOTE.

         THIS GUARANTEE IS SUBJECT TO THE CONDITIONS APPEARING ON THE BACK OF
THIS DOCUMENT.

         THE DATE OF THIS GUARANTEE IS THE SAME AS IN THE NOTE.


                               UNITED STATES OF AMERICA
                               SECRETARY OF COMMERCE
                               NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

                               -----------------------------------------------
                               CHIEF, FINANCIAL SERVICES BRANCH
                               SOUTHEAST REGION

                               -----------------------------------------------
                               NATIONAL MARINE FISHERIES SERVICE





<PAGE>





<PAGE>

NOAA FORM 88-70                                     U. S. DEPARTMENT OF COMMERCE
(4-74)                           NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Case No. OG-G-862

                 PROMISSORY NOTE TO THE UNITED STATES OF AMERICA

                                         City and State:  New Orleans, Louisiana
                                         Date:  September 27, 1994

     FOR VALUE RECEIVED, the undersigned (the "Payor") promises to pay to the
order of the UNITED STATES OF AMERICA, acting by and through the Secretary of
Commerce (the "Payee"), at the office of the Financial Assistance Division,
National Marine Fisheries Service, National Oceanic and Atmospheric
Administration, Silver Spring, Maryland, or at the Payee's option, at such other
place as may be designated from time to time by Payee, the principal amount of
Seven Hundred Sixty-eight Thousand One Hundred Eight Dollars ($768,108.00) with
interest on the unpaid principal computed from the date hereof at the rate of
See *below percent (See * %) per year, payment to be made in installments as
follows:

*The Note's interest rate is to be determined using the three-month (90-day)
London Interbank Offered Rate (LIBOR) plus 45 basis points (rounded up to the
nearest basis point) adjusting quarterly, with a ten percent (10.0%) interest
cap for the first ten (10) years. The interest rate for the first quarterly
payment will be determined on the day the loan is funded and will be adjusted
ninety (90) days prior to each payment due date thereafter. Quarterly principal
plus interest payments will be due on December 27, March 27, June 27, and
September 27, of each year until eighty (80) quarterly payments are made and/or
the loan is fully amortized.

        This Note is given (1) in consideration of, pursuant to the provisions
of Title XI of the Merchant Marine Act, 1936, as amended, the guaranteeing
payment of the unpaid interest on and the unpaid balance of the principal of a
certain promissory note (the "Guaranteed Note") issued by the Payor to Sun Bank
of Tampa Bay on the date hereof relating to the Payor's vessel, TIGER POINT,
Official Number 508606 (the "Vessel"), and (2) to secure payment by the Payor to
the Payee of any amount that the Secretary may be required to pay to the holder
of the Guaranteed Note.

        This Note is also issued pursuant to the provisions of a certain first
preferred ship mortgage (the "Mortgage") dated the date hereof, from the Payor
to the Payee relating to the Vessel.

        This Note has been negotiated and received by the Payee subject to and
secured by the terms of the Mortgage; and is also secured by a Real Estate
Mortgage covering certain property in Vermillion Parish, State of Louisiana.

        The condition of this Note is such that so long as the Guaranteed Note
is outstanding or a substitution therefor (including, but not limited to, an
assumption or refinancing) and until the Guarantee contained within the
Guaranteed Note or substitution therefor shall have been terminated pursuant to
the provisions of the Mortgage and the agreement governing such Guarantee (the
"Guarantee Agreement"), the principal of, and the interest on this Note in
respect of the Guaranteed Note shall be payable as follows:

        (1) by payment of the interest on such Guaranteed Note and by
amortization of the principal of the Guaranteed Note according to the terms of
the Guaranteed Note;

        (2) when such Guaranteed Note has been retired or paid other than by
payment of the Guarantee; and the aforesaid payments shall constitute payment of
the principal of, and the interest on this Note as of the date on which and to
the extent such payment is made, and this Note shall be discharged to the extent
of such payment of principal.

        The principal of this Note and the interest thereon may be declared or
may become due and payable by the declaration of the Payee without demand,
presentment, opportunity to cure, or notice of intent to accelerate, at any 




<PAGE>


<PAGE>

                                       2

time after, (l) the holder of the Guaranteed Note shall have demanded payment of
the Guarantee pursuant to the provisions of the Guarantee Agreement, subject to
such demand for payment of the Guarantee and its consequences being annulled
under certain circumstances, or (2) the Payee has notified the holder of the
Guaranteed Note by the issuance of the Payee's notice of the occurrence of an
Event of Default pursuant to the provisions of the Mortgage and Guarantee
Agreement and said holder has demanded payment of the Guarantee. Thereupon, the
principal of and the interest on this Note shall become immediately due and
payable together with interest and at the same rate for overdue principal.

        This Note is not negotiable, assignable, or transferable without the
written consent of the Payee. This Note shall be cancelled by the Payee and
surrendered to the Payor if all outstanding obligations accruing hereunder or
under the Mortgage are paid.

        The undersigned shall pay all expenses of any nature, whether incurred
in or out of court, and whether incurred before or after this Note shall become
due at its maturity date or otherwise, including but not limited to reasonable
attorney's fees and costs, which Payee may deem necessary or proper in
connection with the satisfaction of the Note or the administration, supervision,
preservation, protection (including, but not limited to, the maintenance of
adequate insurance) of or the realization upon the said Mortgage, as amended, or
other Collateral. The Payee is authorized to pay, at any time and from time to
time, any or all of such expenses, add the amount of such payment to the
principal amount of the Note and Mortgage, and charge interest thereon at the
rate specified herein with respect to interest on the principal amount of this
Note.

        The term "Collateral" as used in this Note shall mean any funds,
guaranties, or other property or rights therein of any nature whatsoever or the
proceeds thereof which may have been, are, or hereafter may be hypothecated,
directly or indirectly by the undersigned or others, in connection with, or as
security for, this Note or any part hereof.

        The obligation of the undersigned hereunder shall not be impaired by the
Payee's indulgence, including, but not limited to (a) any renewal, extension, or
modification which the Payee may grant with respect to the Note or any part
hereof, (b) any surrender, compromise, release, renewal, extension, exchange, or
substitution, which the Payee may grant in respect of the said Mortgage, as
amended, or other Collateral, or (c) any indulgence granted in respect of any
endorser, grantor, or insurer.

        When applicable, the obligation of the undersigned hereunder shall be
joint and several.

                                         Payor

                                         Zapata Protein (USA), Inc.


Attest:                                  By:
                                            -----------------------------------
                                               Vice President and Controller
- ---------------------------------
Secretary

     NOTE: Corporate Payors must execute Note in corporate name by duly
authorized officer and seal must be affixed and duly attested.



<PAGE>




<PAGE>

Case No. OG-G-862

                          FIRST PREFERRED SHIP MORTGAGE
                         TO THE UNITED STATES OF AMERICA

                       ARTICLE I: CREATION OF ENCUMBRANCE

     SECTION 1. PREFERRED SHIP MORTGAGE: THIS MORTGAGE, dated the 27th day of
September, 1994, by Zapata Protein (USA), Inc., P. O. Box 2868, Hammond,
Louisiana, 70404, owning 100%, (herein, the "BORROWER") to the United States of
America, acting by and through the Secretary of Commerce, NOAA, National Marine
Fisheries Service, Financial Services, Southeastern Branch, 9721 Executive
Center Drive North, St. Petersburg, Florida 33702 (herein, the "GOVERNMENT"),

    WITNESSETH:

     SECTION 2. ENCUMBERED VESSEL: WHEREAS, the BORROWER is the sole owner of
the fishing vessel, TIGER POINT, O. N. 508606, more fully described in ARTICLE
I, Section 4, of this Mortgage; and

    SECTION 3. OBLIGATIONS SECURED: WHEREAS, the BORROWER, in consideration of
the issuance of a certain Guarantee by the GOVERNMENT (the "Guarantee"),
pursuant to Title XI of the Merchant Marine Act, 1936, as amended (the "Title
XI"), guaranteeing the payment of the unpaid interest on, and the unpaid balance
of the principal on a certain promissory note dated the date hereof, executed
and delivered by the BORROWER in the principal amount of $768,108 (the
"Guaranteed Note"), has executed and delivered to the GOVERNMENT its promissory
note dated September 27, 1994, in the principal amount of $768,108, a copy of
which is attached hereto as Exhibit 1 (the "Promissory Note"), and has agreed to
execute and deliver this First Preferred Ship Mortgage to the GOVERNMENT (this
"Mortgage") for the purpose of securing the payment of the principal of and
interest on the Promissory Note in accordance with its terms and this Mortgage.

    NOW, THEREFORE, in consideration of the premises 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
Promissory Note, as amended or substituted from time to time, according to the
terms thereof, and the payment of all other sums that may hereafter become
secured by this Mortgage, and to secure the performance and observance of and
compliance with the covenants, terms, and conditions herein, and in the
Promissory Note contained, and in all other documents executed between the
BORROWER and the GOVERNMENT, including, but not limited to the Commitment to
Guarantee Note and the Title XI Financial Agreement, both dated the date hereof,
and to secure the payment of all other indebtedness at any time hereafter owing
by the BORROWER to the UNITED STATES DEPARTMENT OF COMMERCE, has granted,
conveyed, mortgaged, pledged, assigned, transferred, set over, and confirmed and
does by these presents grant, convey, mortgage, pledge, assign, transfer, set
over, and confirm unto the GOVERNMENT the whole of the Vessel described in
SECTION 4, below.

    SECTION 4. SECURITY AGREEMENT: The Vessel subject to this Mortgage is that
certain oil screw vessel named TIGER POINT, Official Number 508606, of about 517
gross tons and 366 net tons, register, together with all her accessories and
appurtenances, including, but not limited to anchors, apparel, boats, boilers,
cables, catch, chains, charter hire, electronics, engines, equipment, fishing
gear, freight, furniture, machinery, masts, motors, nets, product, related gear,
rents or profits, rigging, sails, skiffs, spare parts, spars, substitutions,
supplies, tackle, 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"), BORROWER further grants to the
GOVERNMENT, pursuant to the Uniform Commercial Code of Louisiana, a security
interest in said goods, together with all of BORROWER'S accounts receivable,
contract rights, contracts, general





<PAGE>


<PAGE>


intangibles, inventory, Individual Transferable Quotas, licenses, permits, and
proceeds of any of the foregoing. In the event of a foreclosure sale, under the
terms of this Mortgage, or under judgment of a court, all property herein
described may, at the option of the GOVERNMENT, be sold as a whole or in parts,
and it shall not be necessary to have present at the place of sale the property
or any part thereof. With respect to the property hereinabove described, this
Mortgage shall constitute a security agreement between the BORROWER and the
GOVERNMENT. The GOVERNMENT shall have all of the rights conferred on secured
parties by the Uniform Commercial Code. Such rights shall be cumulative of all
other rights of the GOVERNMENT hereunder. It is expressly agreed that if on
default the GOVERNMENT should proceed to dispose of the property, or any part
thereof, in accordance with the provisions of the Uniform Commercial Code, ten
(10) days notice by the GOVERNMENT to the BORROWER shall be deemed to be
reasonable notice under any provisions of the Uniform Commercial Code requiring
such notice; provided, however, that the GOVERNMENT may at its option dispose of
the property, or any part thereof, in accordance with the GOVERNMENT'S rights
and remedies pursuant to the other provisions of this Mortgage, in lieu of
proceeding under the Uniform Commercial Code.

Should a limited fisheries access system be initiated at some future date under
which the BORROWER is granted, or has been granted, prior to the date of this
Mortgage, a transferable fishery conservation and management allocation
(including, but not limited to, allocations, permits, quotas, licenses, cage
tags, or any other fisheries access restriction or right (however characterized)
of whatsoever nature affecting, necessary for, or in any other way (however
characterized) associated with any of the property included in or subject to the
Security Documents, the BORROWER agrees that it shall grant to the GOVERNMENT a
full senior security interest in such allocation by whatsoever means deemed by
the GOVERNMENT (in the GOVERNMENT'S sole discretion) to be appropriate
(including, but not limited to, the BORROWER'S execution of security agreements
and the filing of financing statements under the U.C.C.). Further, if the
BORROWER fails to do so, the BORROWER agrees that the GOVERNMENT may (in the
GOVERNMENT'S sole discretion) use, for the purpose of executing, delivering, and
otherwise perfecting whatever documents may be required to perfect the grant to
the GOVERNMENT of such a full security interest in such fisheries conservation
and management allocation, the attorney-in-fact authority conferred upon the
GOVERNMENT by the Security Documents.

    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 set out in the first paragraph of this
Mortgage.

    TO HAVE AND TO HOLD all and singular the above-mortgaged and described
property unto the GOVERNMENT 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 Notes in accordance with the terms of the Notes
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
Notes 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 BORROWER hereby covenants and agrees that the Vessel is to be held by
the GOVERNMENT 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

                                       2



<PAGE>


<PAGE>

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 Promissory Note and this Mortgage have
been duly executed and delivered, and the Promissory 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 other liens permitted by Section 8 of ARTICLE II, 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, fully and adequately
protecting the Vessel and the GOVERNMENT'S interest therein against all marine
perils and disasters and all hazards and risks, 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. 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) 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 so long as
this Mortgage shall be in effect; provided that the policies required by
paragraphs (a)(i) and (a)(ii) of this Section may provide, so long as no Event
of Default has occurred and is continuing, that payment of losses up to $100,000
or such other amount as may be approved by the GOVERNMENT, may be paid directly
to the BORROWER provided that the total amount of the loss, net of the
deductible does not exceed $100,000. 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
hereinabove mentioned, 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 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 8, 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. Except as otherwise agreed by the GOVERNMENT, all original
policies,

                                       3



<PAGE>


<PAGE>

binders, certificates, and covenants and all endorsements and riders thereto
shall be delivered to the GOVERNMENT for approval and custody.

    (e) 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 GOVERNMENT shall retain such insurance and, if such Event of Default
is not cured, may apply the same in the manner provided in Article III, SECTION
10, hereof.

    (f) 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
III, SECTION 10, hereof.

    (g) 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 any 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
BORROWER, or of a person authorized by BORROWER, provided the same are paid
immediately when due.

         (iii) imposed on any 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 any 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 significantly material to the
operations or financial condition of BORROWER; and

         (v) arising by operation of law as a result of the modification of the

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<PAGE>

Vessel, including mechanic's liens, provided the same are paid immediately when
due;

         (vi) in favor of the United States of America, the United States
Department of Commerce, 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
BORROWER, BORROWER shall have set aside adequate reserves determined in
accordance with generally accepted accounting principles, provided that for such
deductible amounts and liens or encumbrances which, in the aggregate, exceed US
$100,000.00, such reserves are reasonably satisfactory to the GOVERNMENT and,
provided, further, that the Permitted Liens described herein shall include only
liens which are subordinate to, unless otherwise provided by, applicable law,
the lien of the security interest in each 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 BORROWER and the lienholder, the lienholder
expects payment to be made; provided that, if BORROWER desires to contest an
asserted lien, BORROWER may do so if 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 First 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, for wages of a stevadore when employed directly by
the owner, the operator, master or agent of this Vessel, for salvage, or to the
extent there are liens subordinate to the Mortgage, other liens incident to
current operation for repairs."

    SECTION 5: NOTICES TO THE GOVERNMENT:

    (a) OF ACTION AGAINST VESSEL: In the event that a suit or claim 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 72 hours, notify the GOVERNMENT by telegram or facsimile, confirmed by
letter, and the BORROWER will, within fifteen (15) days thereafter, cause the
Vessel to be discharged.

    (b) OF CASUALTIES OR DAMAGE TO THE VESSEL: Within 72 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.; provided that such obligation
shall not exist with respect to any casualty, accident, or damage that is less
than $50,000 in amount, or is covered by insurance (including any deductible
permitted by this Mortgage).

    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;

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<PAGE>

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.

    (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) BORROWER TO PAY THE COST OF ANNUAL INSPECTIONS, audits or appraisals,
provided for in Paragraphs 6(a) and 6(b), 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 Promissory 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. 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, unless the same are being
contested in good faith and have not led to the imposition of a recorded lien or
judgment lien.

    SECTION 8. REIMBURSEMENT OF GOVERNMENT EXPENDITURES: The BORROWER will
reimburse the GOVERNMENT for any and all expenditures which the GOVERNMENT may
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 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 Promissory Note.

    SECTION 9: GOVERNMENT'S PRIOR WRITTEN CONSENT REQUIRED: The BORROWER shall
not, without prior written consent of the Chief, Financial Services Division,
National Marine Fisheries Service, take any of the following actions:

    (a) SELL, MORTGAGE, TRANSFER, OR 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) REMOVE, ATTEMPT TO REMOVE, OR ALLOW THE VESSEL TO BE MOVED beyond the
Exclusive Economic Zone of the United States of America, as defined in 16 USC
`SS'1802(6).(1)

- ------------------------
(1) 16 USC `SS'1802(6): The Exclusive Economic Zone of the United States is a
zone contiguous to the territorial sea, including zones contiguous to the
territorial sea of the United States, the Commonwealth of Puerto Rico,
the commonwealth of the Northern Mariana Islands (to the extent consistent
with the Covenant and the United Nations Trusteeship Agreement), and the
United States overseas territories and possessions. The Exclusive Economic
Zone extends to a distance 200 nautical miles from the baseline from which
the breadth of the territorial sea is measured. In cases where the maritime
boundary with a neighboring State remains to be determined, the boundary of the
Exclusive Economic Zone shall be determined by the United States and other
State concerned in accordance with equitable principles.

                                       6



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    (c) TRANSFER PORT OF DOCUMENTATION OF THE VESSEL.

    SECTION 10. 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 31301, et seq. in order to establish and maintain this Mortgage
as a First Preferred Ship Mortgage upon the Vessel.

    SECTION 11. OPERATING RESTRICTIONS:

    (a) DOCUMENTATION: The BORROWER will keep the Vessel documented under the
laws of the United States.

    (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) IF THE GOVERNMENT'S WRITTEN CONSENT TO REMOVE THE VESSEL BEYOND THE
LIMITS OF THE UNITED STATES IS OBTAINED, the BORROWER 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.

    (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 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 12. SEVERABILITY CLAUSE: In the event that this Mortgage, the
Promissory Note, 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 Promissory 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 Promissory Note, together with interest thereon, as in the
Promissory Note and as herein provided, and in the performance of the terms and
conditions of the Promissory Note and this Mortgage. Upon failure of the
BORROWER so to do, 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 appoint the GOVERNMENT the agent attorney-in-fact of the
BORROWER so to do. 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.

                              ARTICLE III: DEFAULT

    SECTION 1. THE OCCURRENCE OF ANY OF THE FOLLOWING CONSTITUTES AN EVENT OF
DEFAULT:

    (a) ANY FAILURE TO OBSERVE, PERFORM, COMPLY WITH AND DISCHARGE ALL OF THE
MATERIAL COVENANTS, CONDITIONS, AND OBLIGATIONS WHICH ARE IMPOSED ON:


                                        7



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<PAGE>

         (i) BORROWER by the Commitment to Guarantee Note dated September 27,
1994, the Title XI Financial Agreement, dated September 27, 1994, the Promissory
Note, this Mortgage and any other agreement or document executed in connection
with this Mortgage and the Promissory Note, 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, and such default shall continue for fifteen (15) days after written
notice thereof from the GOVERNMENT; or

         (ii) BORROWER by any Guaranty Agreement, whether or not the BORROWER is
party to said agreement, and such default shall continue for fifteen (15) days
after written notice thereof from the GOVERNMENT; or

    (b) ANY FAILURE TO PAY OR MAKE PAYMENTS ON:

           (i) INTEREST ON THE PROMISSORY NOTE OR THE GUARANTEED NOTE when and
as the same shall become due and payable as therein and herein provided, which
continues for 15 days, and such default shall continue for fifteen (15) days
after written notice thereof from the GOVERNMENT; or

           (ii) PRINCIPAL OF THE PROMISSORY NOTE OR THE GUARANTEED NOTE when and
as the same shall become due and payable, whether at maturity, by notice of
acceleration, or otherwise, and such default shall continue for fifteen (15)
days after written notice thereof from the GOVERNMENT; or

           (iii) GUARANTEE FEES AS REQUIRED BY ARTICLE VII OF THE TITLE XI
FINANCIAL AGREEMENT, WHICH CONTINUES FOR 15 DAYS AFTER NOTICE THEREOF FROM THE
GOVERNMENT; or

    (c) FINANCIAL EVENTS:

           (i) BORROWER makes a general assignment for the benefit of the
BORROWER'S creditors; or

           (ii) BORROWER loses the right to do business, by forfeiture or
otherwise; or

           (iii) A receiver or receivers of any kind whatsoever, whether
appointed or not, in admiralty, bankruptcy, 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

           (iv) A PETITION OR OTHER PROCEEDING OR ACTION IN BANKRUPTCY,
regarding the BORROWER, is filed by the BORROWER or by creditors of the
BORROWER; or

    (d) ACTUAL OR CONSTRUCTIVE UNINSURED TOTAL LOSS OF THE VESSEL; or

    (e) A MATERIAL MISREPRESENTATION OR UNDISCLOSED FACT, made or omitted in any
application, agreement, affidavit, or other document, submitted in connection
with the Guarantee, on behalf of, or for the benefit of, or by the BORROWER; or

    (f) IMPAIRMENT OF ANY OTHER COLLATERAL which is given in addition to the
Vessel which is the subject of this Mortgage, and which is not corrected nor
cured within 60 days after written notice thereof from the GOVERNMENT.

   SECTION 2. GOVERNMENT ACTIONS UPON OCCURRENCE OF AN EVENT OF DEFAULT, whether
or not the Guaranteed Note has been paid to the Lender by the GOVERNMENT, the
GOVERNMENT may, in the GOVERNMENT's discretion, as long as such Event of Default
shall be continuing, include any or all of the following:

    (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 year unless such would violate the usury laws of the state
where this Mortgage, the Note and the Guaranteed Note are executed, in which
case the maximum legal rate of that state shall prevail; and/or

                                       8




<PAGE>


<PAGE>

    (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, or otherwise
hereunder, and collect the same out of any and all property of the BORROWER
whether covered by this Mortgage or otherwise; and/or

    (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 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 for
a reasonable time 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; and/or

    (d) FORECLOSE THIS MORTGAGE pursuant to the terms and provisions of the Ship
Mortgage Act, 1920, as amended, 46 USC 31301, et seq., or by other judicial
process as may be provided in the Statutes; and/or

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

     SECTION 3. WAIVER OF DEFAULT: If the BORROWER shall have removed and
remedied each Event of Default within thirty (30) days after the occurrence
thereof, then in every such case the GOVERNMENT shall waive any such Event of
Default; but no such waiver shall extend to nor affect any subsequent or other
Event of Default nor impair any rights or remedies consequent thereon; and
provided, further, that if at any time after the expiration of thirty (30) days
after any Event of Default shall have occurred, all Events of Default shall have
been remedied and removed and full performance made by the BORROWER to the
satisfaction of the GOVERNMENT and all installments of principal and interest in
arrears (including interest at the rate set out in this SECTION) and the
reasonable charges and expenses, if any, of the GOVERNMENT, its 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.

     SECTION 4. 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

                                       9



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<PAGE>

thereof.

     SECTION 5. BORROWER TRANSFERS POWERS OF ATTORNEY TO GOVERNMENT:

    (a) POWER OF ATTORNEY: 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 in connection with the sale, use
or other disposition pursuant to Section 2 of this Article III, 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.

    (b) POWER OF ATTORNEY: 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 3 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.

    (c) APPOINTMENT OF RECEIVER AND SALE OF VESSEL: 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 3 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, 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
Promissory Note, or otherwise hereunder.

     SECTION 6. THE BORROWER AGREES TO PAY ALL REASONABLE ATTORNEY FEES incurred
by the GOVERNMENT because of BORROWER'S failure to perform or discharge its
obligations, as provided by this Mortgage, the Promissory Note, or any other
document or agreement executed in connection therewith, and BORROWER agrees that
these fees 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 Promissory Note, and upon
acceleration of the amounts owed under the Promissory Note, shall bear interest
at the accelerated rate.

     SECTION 7.  ACTIONS AGAINST THE VESSEL:

    (a) POWER OF ATTORNEY: 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

                                       10



<PAGE>


<PAGE>

attorney of the BORROWER, in its name and stead to apply for and receive
possession of and to take possession of the Vessel 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) POWER OF ATTORNEY: 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.

    (c) JURISDICTION AND VENUE: 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, including, but not limited to the jurisdiction of the federal
court which maintains jurisdiction over the Vessel.

    (d) STATE LAW TO GOVERN: 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 State of Louisiana. The BORROWER irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts
situated in the State of Louisiana in any proceeding relating to this Mortgage
and agrees that any process or summons in any such action may be served by
mailing to BORROWER a copy thereof.

     SECTION 8.   RIGHTS AND REMEDIES OF THE GOVERNMENT:

    (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 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, Promissory Note, Guaranteed 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 9. GOVERNMENTAL FAILURE TO JUDICIALLY ENFORCE THE

                                       11
 


<PAGE>


<PAGE>

PROVISIONS OF THESE DOCUMENTS DOES NOT INVALIDATE SAME: Where the GOVERNMENT
shall have proceeded to enforce any right, power, or remedy under this Mortgage,
or any other document which has been executed by the BORROWER, 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 10. 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), the net earnings from any management, charter, or
other use of the Vessel by the GOVERNMENT under any of the powers above
specified, the proceeds of any claim for damages on account of the Vessel
received by the GOVERNMENT while exercising any such power, and any
compensation, damages, or other payments, including proceeds from any insurance
on the Vessel received by the BORROWER or the GOVERNMENT, on account of an
actual or constructive loss or agreed or compromised total loss or to the
requisition of title to, or seizure or forfeiture of, the Vessel, 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 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;

    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.

                                   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 Article II, SECTION 6, 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 & CONDITIONS OF MORTGAGE

   SECTION 1. TERMS OF THIS MORTGAGE: For the purposes of this Mortgage, the
total amount is SEVEN HUNDRED SIXTY EIGHT THOUSAND ONE HUNDRED EIGHT DOLLARS
($768,108) and interest and performance of mortgage covenants; the date of
maturity is September 27, 2014, and the discharge amount is the same as the
total amount.

    SECTION 2. MULTIPLE ORIGINALS: This Mortgage may be executed simultaneously
in any number of counterparts and all such counterparts executed and delivered

                                       12




<PAGE>


<PAGE>

each as an original shall constitute but one and the same instrument. The
invalidity of any provision of this Mortgage shall not affect the remainder,
which shall in such event be construed as if the invalid provision had not been
inserted.

    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.  DEFINITIONS:

     (a) Any REFERENCE IN THIS MORTGAGE TO ANY OTHER INSTRUMENT or document,
including any reference thereto by a designated term shall for the purpose of
this Mortgage be deemed to mean or refer to, unless the context otherwise
requires, such other instrument or document as the same may be amended or
supplemented in writing or as the provisions thereof may be waived in writing
with the prior written consent (except as they shall be a party or parties
thereto) of the BORROWER and the GOVERNMENT.

     (b) The term "POLICIES OF INSURANCE" as used herein, means any and all
insurance policies and related binders, riders, endorsements, certificates of
entry, etc., e.g., those referred to in SECTION 2 of Article II.

     (c) The term "COLLATERAL" as used herein, means any funds, guaranties, or
other property or rights therein of any nature whatsoever or the proceeds
thereof which may have been, are, or hereafter may be hypothecated, directly or
indirectly by the undersigned or others, in connection with, or as security for,
this Mortgage or any part hereof.

     (d) The term "BORROWER" includes individuals and entities; singular and
plural; and masculine and feminine gender.

     (e) The term "AFFILIATE" as used herein shall include any person or concern
that, directly or indirectly, through one or more intermediates, controls, or is
controlled by, or is under common control with, the BORROWER. The term "CONTROL"
including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the BORROWER, whether through
ownership, by contract, or otherwise.

     (f) The term "SECURITY DOCUMENTS" UCC Agreements, Title XI Financial
Agreements, Commitment to Guarantee Note, United States Guaranteed Promissory
Note, First Preferred Ship Mortgage to the USA, Promissory Note to the United
States of America, Guaranty Agreement, Mortgagor's Certificate, Security
Agreement, Collateral Mortgage and Collateral Assignment of Leases, Collateral
Mortgage Note, etc.

     SECTION 7: TERMINATION OF MORTGAGE: If the whole amount of the Note and the
Guaranteed Note, including all amendments or substitutions to either, (principal
and interest) shall be paid in accordance with its terms and the terms of this
Mortgage, 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, at the request of
BORROWER and

                                       13




<PAGE>


<PAGE>

at BORROWER's cost and expense, shall execute on forms prepared by BORROWER
which are satisfactory to the GOVERNMENT, and deliver to BORROWER proper
instruments acknowledging satisfaction of and discharging this Mortgage.

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

ATTEST:                                  BORROWER:   Zapata Protein (USA), Inc.

By:                                      By:
    ---------------------                       -------------------------

Title: Secretary                         Title: Vice President and Controller

Date: September 27, 1994


                                       14



<PAGE>





<PAGE>

                               COLLATERAL MORTGAGE
                       AND COLLATERAL ASSIGNMENT OF LEASES

        BE IT KNOWN, that on the 27th day of September, 1994,

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

PERSONALLY CAME AND APPEARED:

ZAPATA PROTEIN (USA), INC. a Virginia Corporation (hereinafter sometimes
referred to as "Mortgagor") appearing herein by and through its authorized
officer, duly authorized to act herein by resolutions by its Board of Directors,
a certified copy of which is attached hereto and made a part hereof, marked as
Exhibit "A", who declared unto me, Notary, that Mortgagor is justly and truly
indebted unto any future holder or holders of the Note (as hereinafter defined)
in the principal sum of ONE MILLION, FIVE HUNDRED EIGHTY-SEVEN THOUSAND, SIX
HUNDRED THIRTY-SIX AND 00/100 ($1,587,636.00) DOLLARS. To evidence such
indebtedness, Mortgagor has executed, under the date of these presents, one
certain promissory note (the "Note") for the said sum of ONE MILLION, FIVE
HUNDRED EIGHTY-SEVEN THOUSAND, SIX HUNDRED THIRTY-SIX AND 00/100 ($1,587,636.00)
DOLLARS made payable to Bearer, due on demand at the offices of United States
Department of Commerce, National Oceanic and Atmospheric Administration,
National Marine Fisheries Service, Washington, D.C., 20235, and bearing at the
rate of eighteen (18%) percent per annum from the date hereof until paid, and
ten (10%) percent attorneys' fees, which Note, after having been paraphed "Ne
Varietur" by me, Notary, for identification, herewith, was delivered to
Mortgagor, who acknowledges the receipt thereof. A copy of the Note is attached
hereto and made a part hereof, marked as Exhibit "B".

Mortgagor further declared that the Note is given and this Mortgage is granted
for the purpose of being used as collateral security by Mortgagor to secure any
liability, indebtedness or obligation due any future holder or holders of the
Note, direct of contingent. The Note may be issued and pledged by Mortgagor as
its interest and convenience may require, to secure loans and advances made or
to be made or to secure the debt of Mortgagor of any third party. Upon the
payment of said indebtedness, the Note may be returned to Mortgagor without
extinguishment of the Mortgage herein granted, and may, at any time and as many
times thereafter as the interest of Mortgagor may require, be again reissued or
repledged by Mortgagor as collateral security, and this Mortgage shall be and
remain in full force and effect to secure the Note until the Note has been
cancelled on its face and this mortgage has been released of record. As used
herein, the term "Mortgagee" shall mean any future holder or holders of the
Note, whether one or more.

        In case the Note should be placed in the hands of an attorney-at-law to
institute legal proceedings to recover the amount thereof or any part thereof,
in principal or interest, or to protect the interests of the holder or holders
thereof, or in case the same should be placed in the hands of an attorney for
collection, compromise or any other action, Mortgagor hereby agrees to pay the
fee of the attorney who may be employed for that purpose, which fee shall be
reasonable




<PAGE>


<PAGE>

attorneys fees or ten (10%) percent of the amount due or sued for or claimed or
sought to be protected, preserved or enforced.

        Now, in order to secure the payment of the said indebtedness evidenced
by the Note, together with all interest, attorneys' fees and costs, the
Mortgagor does, by these presents, specifically mortgage, affect and hypothecate
unto and in favor of the Mortgagee, whether the Note is held as an original
obligation or in pledge, the following property:

                                       I.

The lands and leasehold estates more fully described on Exhibit "C" attached
hereto and made a part hereof for all purposes, and any after-acquired title to
any of the foregoing (the "Land").

                                       II.

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

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

Should a limited fisheries access system be initiated at some future date under
which the Debtor [Zapata Protein (USA), Inc.] is granted a transferable fishery
conservation and management allocation (including, but not limited, to,
allocations, permits, quotas, licenses, cage tags, or any other fisheries access
restriction or right [however characterized] of whatsoever nature) affecting,
necessary for, or in any other way (however characterized) associated with any
of the property included in or subject to the Security Agreement the Debtor
agrees that it shall grant to Secured Party (Secretary of Commerce) a full
senior security interest in such allocation by whatsoever means deemed by the
Secured Party (in its sole discretion) to be appropriate (including, but not
limited to, the Debtor's execution of security agreements and the filing of
financing statements under the U.C.C.) Further, if the Debtor fails to do so,
the Debtor agrees that the Secured Party may (in its sole discretion) use, for
the purpose of executing, delivering, and otherwise perfecting whatever
documents may be required to perfect the grant to Secured Party of such a full
security interest in such fisheries conservation and management allocation, the
attorney-in-fact authority conferred upon the Secured Party by the Security
Agreement.

        Overdue guarantee fees under any New Guaranteed Note shall, beginning
with the first day such guarantee fees are due but unpaid, be added to the
principal of the First or Second Note corresponding with such New Guaranteed
Note, earn interest at the same rate as specified in the First or Second Note
for overdue principal, and be secured by the Security Agreement, and will be due
under the note and secured by this mortgage. This shall not be deemed to have
waived any of the Secured Party's rights under the Security Agreement and such
overdue guarantee fees shall remain due and payable on their originally
scheduled date.




<PAGE>


<PAGE>

As additional security for the payment of the Note and the payment of all
indebtedness secured by a pledge of the Note, up the aggregate amount of ONE
MILLION, FIVE HUNDRED EIGHTY-SEVEN THOUSAND, SIX HUNDRED THIRTY-SIX AND 00/100
($1,587,636.00) DOLLARS at any one time outstanding, Mortgagor hereby (a)
pledges and assigns unto Mortgagee all of the Mortgagor's right, title and
interest in and to all leases ("Leases") presently or hereafter granted and
bearing against the Mortgaged Property, or any part thereof, and (b) pledges,
pawns and assigns unto Mortgagee all of the rentals, income, profits or other
sums ("Rents") due or becoming due under the Leases; provided, however,
Mortgagor is hereby granted a license to exercise all of the Mortgagor's rights
under the Leases and to collect the Rentals so long as no Event of Default
hereunder shall have occurred or be continuing. If at any time an Event of
Default hereunder shall occur or continue, Mortgagee may, at Mortgagee's option,
give written notice to all lessees under the Leases of such default by
Mortgagor, thereby terminating the license hereby granted to Mortgagor, and
Mortgagee may enter upon and take possession of the leased premises, and perform
all acts necessary for the operation and the maintenance of the said premises in
the same manner and to the same extent that the Mortgagor might reasonably so
act, such entry or taking possession to be made by actual entry or possession or
by written notice served personally upon or sent by certified mail to Mortgagor,
and no further authorization shall be required. In furtherance thereof and no by
way of limitation, Mortgagee is specifically empowered to demand, sue for,
collect or receive all of the Rents which shall be paid by the lessees under the
Leases; and to exercise all of the rights and privileges of Mortgagor under the
Leases, including, but not limited to, the right to fix or modify the amount of
Rents. Mortgagor irrevocably consents that all lessees under the Leases, upon
demand and notice from Mortgagee of Mortgagor's default hereunder, shall be
authorized to pay the Rents under the Leases directly to Mortgagee without
liability of said lessees for the determination of the actual existence of any
default by Mortgagor claimed by Mortgagee, said lessees being hereby expressly
relieved of any and all duty, liability, and obligation to Mortgagor in
connection with any and all Rents so paid. Mortgagee shall apply the net amount
of the Rents collected after payment of all proper costs and charges, as a
credit against the indebtedness secured hereby. Mortgagor agrees to indemnify
and hold Mortgagee harmless from any and all liability, loss or damage which
Mortgagee may incur under the Leases by reason of this pledge and assignment,
and nothing herein contained shall be construed to bind Mortgagee to the
performance of any of the terms and provisions contained in the Leases, or
otherwise to impose any obligation on Mortgagee. The pledge and assignment
granted here is made pursuant to the provisions of La. R.S. 9:4401.

        An Event of Default hereunder shall be if Mortgagor fails or refuses to
pay any amounts due and owing under the Note upon demand.

        And Mortgagor acknowledges the obligation secured hereby, whether now
existing or to arise hereafter, and confesses judgment thereon, if said
obligations are not paid at maturity, in favor of Mortgagee and does by these
presents consent, agree and stipulate that in the event the Note or any interest
hereon not being punctually paid when demanded by Mortgagee, the Note, at the
option of Mortgagee, shall ipso facto mature and become due and payable,
anything therein contained to the contrary notwithstanding, and it shall be
lawful for and the Mortgagor does hereby authorize Mortgagee without making a
demand or putting Mortgagor in default, a putting in default being expressly
waived, to cause all and singular the Mortgaged Property to be seized




<PAGE>


<PAGE>

and sold after due process of law, Mortgagor waiving the benefit of any and all
laws or parts of laws relative to the appraisement of the property seized and
sold under executory process or other legal process, and consenting that the
Mortgaged Property be sold without appraisement, either in its entirety or in
lots or parcels, as Mortgagee may determine, to the highest bidder for cash or
on such terms as the plaintiff in such proceedings may direct.

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

      Mortgagor hereby waives (a) the benefit of appraisement provided for in
Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of Civil Procedure and
all other laws concerning the same; (b) the demand and three (3) days notice of
demand as provided in Articles 2639 and 2721 of the Louisiana Code of Civil
Procedures; (c) the notice of seizure provided for in Articles 2293 and 2721 of
the Louisiana Code of Civil Procedure; and (d) the three (3) days delay provided
for in Articles 2331 and 2722 of the Louisiana Code of Civil Procedure;
Mortgagor expressly agrees to the immediate seizure of the Mortgaged Property in
the event the suit hereon; and Mortgagee shall be entitled to all of the rights
and remedies provided for in R.S. 9:5351 et seq.

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

NOW INTERVENES, the undersigned intervenor, who hereby accepts this Mortgage on
behalf of Mortgagee.

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

                                                   ZAPATA PROTEIN (USA), INC.

WITNESSES:
                                                   BY:
                                                      --------------------------
- ---------------------------------
                                                   TITLE:
                                                         -----------------------

- ---------------------------------                  
                                                   -----------------------------
                                                   INTERVENOR


                                    --------------------------------
                                    NOTARY PUBLIC



<PAGE>





<PAGE>

                            COLLATERAL MORTGAGE NOTE

$1,587, 636.00

                                                          September 27, 1994

                                                          DATE

        FOR VALUE RECEIVED, on demand, the undersigned, promises to pay the
Bearer at the main offices of the United States Department of Commerce, National
Oceanic and Atmospheric Administration, National Marine Fisheries Service,
Washington, D.C., 20235, the principal sum of ONE MILLION, FIVE HUNDRED
EIGHTY-SEVEN THOUSAND, SIX HUNDRED THIRTY-SIX AND 00/100 ($1,587,636.00)
DOLLARS, together with interest thereon at the rate eighteen percent (18%) per
annum from the date hereof until paid.

        In case this Note should be placed in the hands of an attorney-at-law to
institute legal proceedings to recover the amount hereof or any part hereof, in
principal or interest, or to protect the interests of the holder or holders
hereof, or in case the same should be placed in the hands of an attomey for
collection, compromise or other action, the Maker of this Note hereby agrees to
pay the fee of the attomey who may be employed for the purpose, which fee is
hereby fixed at ten percent (10%) of the amount due or sued for or claimed or
sought to be protected, preserved or enforced.

      The Maker of this Note and the endorsers, guarantors and sureties hereon
hereby severally waive presentment for payment, demand, notice of nonpayment,
protect, and all pleas of division and discussion, and agree that the time of
payment hereof may be extended from time to time, one or more times without
notice of such extension or extensions and without previous consent, hereby
binding themselves, in solido, unconditionally, and as original promissors, for
the payment hereof in principal, interest, costs and attorneys' fees. No delay
on the part of the holder hereof in exercising any rights hereunder shall
operate as a waiver of such rights.

        This note shall be governed by and construed in accordance with the laws
of the State of Louisiana.

                                         ZAPATA PROTEIN (USA), INC.

                                         BY:
                                            ----------------------------------

        "Ne Varietur" 
For identification with an Act 
of Collateral Mortgage and Collateral 
Assignment of Leases this 27th day 
of September 1994.

- ---------------------------------------
NOTARY PUBLIC



<PAGE>




<PAGE>



                           COLLATERAL PLEDGE AGREEMENT

This Collateral Pledge Agreement ("Agreement"), dated September 27, 1994, is
made between Zapata Protein (USA), Inc. ("Borrower") in favor of United States
of America, acting by and through the Secretary of Commerce, National Marine
Fisheries Service ("Lender").

                                    Recitals

     A. The Borrower is the owner of the immovable property and leasehold
interests (the "Mortgaged Property") more particularly described in that certain
act of collateral mortgage (The "Collateral Mortgage") executed by the Borrower
of even date herewith in the principal amount of $1,587,636.00, which secures
that certain collateral mortgage note (the "Collateral Note") executed by the
Borrower of even date herewith, payable on demand to bearer in the principal sum
of $1,587,636.00 and paraphed for identification with the Collateral Mortgage.

     B. The Lender intends to make a certain loan or loans to Borrower
(Collectively, the "Loan"), which Loan will be secured in part by the Collateral
Mortgage.

     C. In order to secure the full and punctual payment and performance of the
Indebtedness (as hereinafter defined), the Borrower has agreed to execute and
deliver this Agreement and to pledge, deliver and grant a continuing security
interest in and to the Collateral Note.

                                    AGREEMENT

NOW, THEREFORE, in consideration of the premises, the Borrower and the Lender
agree as follows:

     Section 1. Pledge of Collateral Note. The Borrower does hereby pledge,
pawn, grant a continuing security interest in and deliver the Collateral Note
unto the Lender, together with all of the Borrower's right, title and interest
in the Collateral Mortgage, to secure the full and punctual payment and
performance of any and an amounts, liabilities and obligations owing from time
to time by the Borrower to the Lender or any successor or transferee thereof,
whether such amounts, liabilities or obligations be liquidated or unliquidated,
now existing or hereinafter arising (the "Indebtedness"), the Borrower does
hereby pledge, pawn, grant a continuing security interest in and deliver the
Collateral Note unto the Lender, together with all of the Borrower's right,
title and interest in the Collateral Mortgage.

     Section 2. Delivery of Collateral Note. The Lender hereby accepts the
delivery of the Collateral Note on behalf of itself and on behalf of any future
transferee of the Indebtedness.

     Section 3. Remedies upon Default. If an Event of Default (as defined in any
promissory note or loan agreement relating to the Loan) shall occur, or if
Borrower shall otherwise be in default under the Collateral Note, the Collateral
Mortgage or any other documents executed in connection with the Indebtedness,
the Lender shall have the right to foreclose on the Collateral Note and
Collateral Mortgage and to cause all and singular the Mortgaged Property to be
seized and sold under executory or ordinary process, at the Lender's option,
without appraisement, as an




<PAGE>


<PAGE>


entirety or in parcels, as the Lender may determine, and otherwise to exercise
the rights, powers and privileges afforded by the Collateral Mortgage and under
applicable Louisiana law. For the purposes of Louisiana executory process
procedures, the Borrower does hereby confess judgment in the full amount of the
Indebtedness. The Lender shall have the right to apply the proceeds of such
foreclosure proceedings to the cost of enforcement (including court costs,
keeper fees and attorneys' fees) and to the Indebtedness (in principal,
interest, late charges or other amounts) in such order as the Lender shall in
its sole discretion determine.

     Section 4. Termination. Upon the payment in full of the Indebtedness and
the termination of any obligation of the Lender to make further advances to the
Borrower on the Loan, this Agreement shall terminate. Upon request of the
Borrower, the Lender shall deliver the Collateral Note to the Borrower and, at
the Borrower's expense, the Lender shall execute and deliver such instrument or
instruments, if any, as the Borrower may reasonably request to evidence the
cancellation of the Collateral Mortgage in the public records.

     Section 5. Notices. Any notice or demand which, by provision of this
Agreement, is required or permitted to be given or served by the Lender to or on
the Borrower shall be deemed to have been sufficiently given and served for all
purposes (if mailed) three calendar days after being deposited, postage prepaid,
in the United States mail, registered or certified mail, or (if delivered by
express courier) one business day after being delivered to such courier, or (if
delivered in person) the same day as delivery, in each case addressed (until
another address or addresses is given in writing by Borrower or Lender) as
follows:

                             1514 Martens Drive
                             Hammond, Louisiana 70401

     Any notice or demand which, by any provision of this Agreement, is required
or permitted to be given or served by Borrower to or on Lender shall be deemed
to have been sufficiently given and served for all purposes (if mailed) three
calendar days after being deposited, postage prepaid, in the United States mail,
registered or certified mail, or (if delivered by express courier) one business
day after being delivered to such courier, or (if delivered in person) the same
day as delivery, in each case addressed (until another address or addresses are
given in writing by Lender to Borrower) as follows:

                             1335 East-West Highway
                             Silver Spring, Maryland

     Section 6. Amendment. Neither this Agreement nor any provision thereof may
be changed, waived, discharged or terminated orally or in any manner other than
by an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.

     Section 7. Waivers. No course of dealing on the part of the Lender, its
officers, employees, consultants or agents, nor any failure or delay by the
Lender with respect to exercising any of its rights, powers or privileges under
this Agreement, the Collateral Mortgage or the Collateral Note shall operate as
a waiver thereof.




<PAGE>


<PAGE>


     Section 8. Cumulative Rights. The rights and remedies of the Lender under
this Agreement shall be cumulative, and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.

     Section 9. Titles of Sections. All titles or headings to sections of this
Agreement are only for the convenience of the parties and shall not be construed
to have any effect or meaning with respect to the other content of such
sections, such other content being controlling as to the agreement between the
parties hereto.

     Section 10. Governing Law. This Agreement is the contract made under and
shall be construed in accordance with and governed by the laws of the United
States of America and the State of Louisiana.

     Section 11. Successors and Assigns' Participants. (a) All covenants and
agreements contained by or on behalf of the Borrower in this Agreement, the
Collateral Note and the Collateral Mortgage shall bind its successors and
assigns and shall inure to the benefit of the Lender and its successors and
assigns.

     (b) This Agreement is for the benefit of the Lender and for such other
person or persons as may from time to time become or be the holders of any of
the Indebtedness, and this Agreement shall be transferable and negotiable, with
the same force and effect and to the same extent as the Indebtedness may be
transferable, it being understood that, upon the transfer or assignment by the
Lender of any of the Indebtedness, the legal holder of such Indebtedness shall
have all of the rights granted to the Lender under this Agreement.

     (c) Borrower hereby recognizes and agrees that the Lender may, from time to
time, one or more times, transfer all or any portion of the Indebtedness to one
or more third parties. Such transfers may include, but are not limited to, sales
of participation interests in such Indebtedness in favor of one or more third
party lenders. Borrower specifically (i) consents to all such transfers and
assignments, waives any subsequent notice of and right to consent to any such
transfers and assignments as may be provided under applicable Louisiana law;
(ii) agrees that the purchaser of a participation interest in the Indebtedness
will be considered as the absolute owner of a percentage interest of such
Indebtedness and that such a purchaser will have all of the rights granted to
the purchaser under any participation agreement governing the sale of such a
participation interest; (iii) waives any right of offset that Borrower may have
against the Lender and/or any purchaser of such a participation interest in the
Indebtedness unconditionally agrees that either the Lender or such a purchaser
may enforce Borrower's Indebtedness under this Agreement, irrespective of the
failure or insolvency of the Lender or any such purchaser; (iv) agrees that any
purchaser of a participation interest in the Indebtedness may exercise any and
all rights of counterclaim, set-off, banker's lien and other liens with respect
to any and all monies owing to the Borrower; and (v) agrees that, upon any
transfer of all or any portion of the Indebtedness, the Lender may transfer and
deliver the Collateral Note to the transferee of such Indebtedness and such
Collateral Note and the Collateral Mortgage shall secure any and all of the
Indebtedness in favor of such a transferee, that such transfer of the Collateral
Note and the Collateral Mortgage shall not affect the priority and ranking
thereof, and that the Collateral Note and the Collateral Mortgage shall secure
with retroactivity the then existing Indebtedness of the




<PAGE>


<PAGE>


Borrower to the transferee and any and all Indebtedness thereafter arising.
After any such transfer has taken place, the Lender shall be fully discharged
from any and all future liability and responsibility to Borrower with respect to
the Collateral Note and the Collateral Mortgage, and the transferee thereafter
shall be vested with all the powers, rights and duties with respect to the
Collateral Note and the Collateral Mortgage.

     Section 12. Counterparts. This Agreement may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof; each counterpart shall be
deemed an original, but all of which when taken together shall constitute one
and the same instrument.


BORROWER:                         Zapata Protein (USA), Inc.



                                  By:
                                     ----------------------------------------



LENDER:                           United States of America acting by and through
                                  the Secretary of Commerce, National Marine
                                  Fisheries Service



                                  By:
                                     ----------------------------------------







<PAGE>





<PAGE>


Case No. OG-G-862

                               GUARANTY AGREEMENT

        THIS GUARANTY AGREEMENT, is made and entered into by Zapata Protein,
Inc. (the "Guarantor"), and the UNITED STATES OF AMERICA, acting by and through
the Secretary of Commerce (the "Secretary").

        Heretofore the Secretary has made, entered into, and delivered a certain
Commitment to Guarantee Note (the "Commitment"), dated September 27, 1994, and
such Commitment has been accepted by Zapata Protein (USA), Inc., (the "Payor").
The Guarantor is advised that the Commitment contemplates the issuance of an
obligation in the amount of $768,108.00 by the Payor to Sun Bank of Tampa Bay
(the "Payee") which will be guaranteed by the Secretary (the "Guaranteed Note").
The consideration for the Guaranteed Note is a loan from the Payee to the Payor.
The Commitment also contemplates the issuance of a promissory note by the Payor
(the "Note") which will be secured by a certain First Preferred Ship Mortgage to
the UNITED STATES OF AMERICA on the fishing vessel, TIGER POINT, Official Number
508606, and a Real Estate Mortgage from the Payor to the Secretary to be
executed and delivered by the Payor to the Secretary (the "Mortgage"). The
consideration for the Note and Mortgage is the Secretary's guarantee contained
in the Guaranteed Note.

        The Guarantor understands that the Secretary is unwilling to enter into
the aforementioned transaction unless payment pursuant to the Note and Mortgage
shall be guaranteed unconditionally by the Guarantor. This Guaranty Agreement is
executed and delivered by the Guarantor in order to induce the Secretary to
enter into the aforementioned transaction with the Payor and Payee.

        NOW, THEREFORE, in consideration of the premises and the mutual promises
of the Guarantor, the Guarantor (jointly, severally and in solido, if the
Guarantor consists of more than one person or entity) agrees with and
unconditionally guarantees to the Secretary the following:

         1. The Guarantor unconditionally guarantees that all sums stated in
either the Note or the Mortgage to be payable to the Secretary, shall be
promptly paid in full when due, in accordance with the provisions governing such
payment. This Guaranty is unconditional and absolute and if for any reason such
sums, or any part thereof, shall not be paid promptly when due, the Guarantor
will immediately pay the same to the Secretary pursuant to the provisions
governing such payment, regardless of any defenses or rights of setoff or
counterclaims which the Payor may have or assert, and regardless of whether the
Payee or the Secretary shall have taken any steps to enforce any rights against
the Payor or any other person to collect such sums, or any part thereof, and
regardless of any other condition or contingency. The Guarantor also agrees to
pay the Secretary the costs and expenses of collecting such sums, or any part
thereof, or of enforcing this Guaranty Agreement, including attorneys' fees.

         2. The Guarantor unconditionally guarantees that the Payor will
promptly and punctually pay all other sums payable under either the Note or the
Mortgage, and will duly perform and observe each and every agreement, covenant,
term, and condition in such Note and Mortgage to be performed or observed by the
Payor, and




<PAGE>


<PAGE>

                                       2

upon the Payor's failure to do so, the Guarantor will promptly pay such sums and
duly perform and observe each such agreement, covenant, term and condition, or
cause the same promptly to be performed and observed.

         3. The obligations, covenants, agreements and duties of the Guarantor
under this Guaranty Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following with respect to the
Note or the Mortgage, although without notice to or the further consent of the
Guarantor:

             (a) The waiver by the Payee or the Secretary, or the successors or
assigns of either of them, of the performance or observance by the Payor or the
Guarantor of any of the agreements, covenants, terms or conditions contained in
either of such instruments;

             (b) The extension, in whole or in part, of the time for payment by
the Payor or the Guarantor of any sums owing or payable under either of such
instruments, or of the time for performance by the Payor or the Guarantor of any
other obligations under or arising out of or on account of either of such
instruments;

             (c)  The modification or amendment (whether material or otherwise)
of any of the obligations of the Payor or any of the Guarantor as set forth in
either of such instruments;

             (d)  The doing or the omission of any of the acts referred to in
either of such instruments;

             (e) Any failure, omission, or delay of the Payee or the Secretary
to enforce, assert, or exercise any right, power or remedy conferred on the
Payee or the Secretary in each of such instruments, or any action on the part of
the Payee or the Secretary granting indulgence or extension in any form
whatsoever;

             (f) The voluntary or involuntary liquidation, dissolution or sale
of all or substantially all of the assets, the marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition, or readjustment of, or
other similar proceeding affecting the Payor or any of its assets; and

             (g) The release of the Payor or the Guarantor or any of them from
the performance or observance of any of the agreements, covenants, terms or
conditions contained in either of such instruments by the operation of the law.

             (h) Any Order or Judgment entered by a Bankruptcy Court which
diminishes, discharges or declares any of the obligations or amounts owned under
the Note and Mortgage to be paid or satisfied. The undersigned hereby waive any
defense based upon any Bankruptcy Court order or judgment with respect to any
action based upon this Guaranty Agreement, which is brought against the
undersigned in Federal District Court.

             (i) The assumption and/or refinancing of the underlying
indebtedness by a third party.




<PAGE>


<PAGE>

                                       3


         4. Notice of acceptance of this Guaranty Agreement and notice of any
obligations or liabilities contracted or incurred by the Payor are hereby waived
by the Guarantor.

         5. This Guaranty Agreement may not be modified or amended except by a
written agreement executed by the Guarantor with the consent in writing of the
Secretary.

         6. This Guaranty Agreement may be assigned to any holder of the Note
and the Mortgage.

         7. All agreements, covenants, terms and conditions in this Guaranty
Agreement shall inure to the benefit of the Secretary and his successors and
assigns, and, without limitation of the generality of the foregoing, shall in
particular inure to the benefit of any holder of the Note and Mortgage.

         8. The signature of the Guarantor hereto is, in addition to and not in
limitation of the foregoing, intended as and to have the effect of an
endorsement of the Note by the Guarantor, who hereby waives presentment, demand
of payment, opportunity to cure, notice of intent to accelerate, protest and
notice of nonpayment or dishonor, and of protest of the Note and any and all
other notices and demands whatsoever.

         9. The terms of this Guaranty Agreement shall apply to the Note and to
the Mortgage and shall bind the Guarantor to the same extent as though each of
them executed and delivered a separate instrument of guaranty with respect to
each of such instruments and annexed the same thereto.

        10. This Guaranty shall be binding upon the Guarantor and the
Guarantor's heirs, executors, administrators, successors, assigns and other
legal representatives.

        11. Prior written consent must be granted by the Secretary, consent of
which will not be unnecessarily withheld, before the Guarantor shall split-up,
split-off, spin-off, merge, consolidate, or transfer or allow transfer of its
shares and/or assets as to effect a change in its controlling interest,
management, and financial conditions.

         12. If the Guarantor is a corporation, this Guaranty Agreement shall be
binding upon its parent corporation and its subsidiaries.

        IN WITNESS WHEREOF, the undersigned have executed and delivered this
Guaranty Agreement.


Date: September 27, 1994

Attest:                                      GUARANTOR:  Zapata Protein, Inc.

By:_____________________________             By:________________________________
   Secretary                                    Executive Vice President-Finance
                                                and Administration




<PAGE>


<PAGE>

                                       4


                                 ACKNOWLEDGMENT

STATE OF LOUISIANA    )
                      ) ss
PARISH OF ORLEANS     )

        On the 27th day of September, 1994, before me personally appeared Joseph
D. Oliver to me known, who being by me duly sworn, did depose and say that he is
the Executive Vice President-Finance and Administration of Zapata Protein, Inc.,
the corporation described in and which executed the foregoing instrument; and
that he signed his name to said instrument by order of the Board of Directors of
said corporation; and the said Joseph D. Oliver acknowledged to me that he
executed said instrument as the Executive Vice President-Finance and
Administration of said corporation; that the same is the free and voluntary act
and deed of said corporation and of himself as such Executive Vice
President-Finance and Administration, for the uses and purposes therein
expressed.


                                          ______________________________________
                                                      Notary Public

                                          My commission expires_________________



UNITED STATES OF AMERICA
Secretary of Commerce
National Oceanic and Atmospheric Administration


_______________________________________________
Chief, Financial Services Branch
Southeast Region
National Marine Fisheries Service






<PAGE>





<PAGE>




Case No. OG-G-862

                          TITLE XI FINANCIAL AGREEMENT

    THIS TITLE XI FINANCIAL AGREEMENT (hereinafter, the "Financial Agreement")
dated September 27, 1994, is made and entered into by Zapata Protein (USA), Inc.
(hereinafter, the "Borrower"), Zapata Protein, Inc. (hereinafter, the
"Guarantor"), and the UNITED STATES OF AMERICA (hereinafter, the "Government"),

    WHEREAS, heretofore the Government, pursuant to the Fisheries Obligation
Guarantee Program, as provided in 46 USC 'SS'1271, et. seq., (hereinafter
"FOG"), made, entered into, and delivered certain agreements and covenants, as
contained in the Commitment to Guarantee Note (hereinafter, the "Commitment"),
dated September 27, 1994, and such Commitment has been accepted by the Borrower.
The Commitment contemplates a loan from Sun Bank of Tampa Bay (hereinafter, the
"Bank")(1) to Borrower, in the amount of $768,108.00, the repayment of which is
guaranteed by the Government. This transaction will be evidenced by the issuance
of a United States Guaranteed Promissory Note in the amount of $768,108.00 by
the Borrower to the Bank (hereinafter, the "Guaranteed Note"). The consideration
for the Guaranteed Note is a loan from the Bank to the Borrower; and the
issuance of a Promissory Note to the United States of America by the Borrower
(hereinafter, the "Promissory Note") secured by the property listed in ARTICLES
II and III, below; and

    WHEREAS, the consideration for the Promissory Note, Ship Mortgage, Real
Estate Mortgage, UCC Security Interests, and other related documents executed by
Borrower and the Guarantor is the Government's guarantee contained in the
Guaranteed Note, as may be amended or substituted from time to time, and the
Borrower and the Guarantor understand that the Government is unwilling to enter
into the aforementioned transaction unless this Financial Agreement and related
documents are executed by the Borrower and the Guarantor. For that reason, the
Borrower and Guarantor have agreed to execute and deliver this Financial
Agreement.

    NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Borrower and the Guarantor hereby agree to the following:

                             ARTICLE I: DEFINITIONS

As used herein, the following terms will be construed to have the meanings set
out below:

    1. All of the terms defined in the preceding paragraphs will have the
definitions set out in said paragraphs.

    2. "COLLATERAL" includes all of the items set out in ARTICLES II and III of
this Financial Agreement.

    3. "DEFAULT" is defined in ARTICLE IX of this Financial Agreement.

    4. "FOG DEBT": The outstanding balance of the loan from Bank to Borrower
which is guaranteed by the Government, including original or additional or
supplemental principal and/or interest, and any fees, costs or expenses, of any
nature, which are

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




<PAGE>


<PAGE>



owed by Borrower to the Government, and, additionally, any amount owed to a
third party which arose from this loan and/or collateral associated with this
loan.

    5. "THE GUARANTOR": Refers to the Principal and is defined as set out in
ARTICLE II, Paragraph 3, below.

    6. "AFFILIATE": Includes all wholly owned subsidiaries and stockholders of
Zapata Protein (USA), Inc., and the guarantor of this debt.

                             ARTICLE II: COLLATERAL

The Collateral which the Borrower is giving to the Government in order to obtain
its guarantee of Borrower's loan from the Bank includes all of the items listed
below:

    1. THE EQUIPMENT: The Borrower will provide to the Government Senior
security interests, evidenced by UCC filings, in the full amount of the
Guaranteed Note, on all of the property described below (hereinafter, the
"Equipment");

        All fisheries unloading, processing, holding, and distribution equipment
        of whatsoever nature, now or at any time in the future, together with
        all accessories, improvements, replacements, substitutions, or additions
        thereto, used for the Borrower's fisheries operations on the properties
        which secure the Promissory Note and any other debt to the Government,
        or on any other premises at any other site at which the Borrower now
        conducts, or in the future may conduct, its fisheries operations and
        regardless of the Equipment's actual location at any given time. The
        Equipment shall include, but not be limited to: all forklifts, bobcats,
        cranes, pallet trucks, lift trucks, and other product or material
        movement equipment; all trailers, tanks, trucks, or other rolling stock;
        all fish unloading, transfer, and conveying equipment, all fish
        processing and fish weighing equipment; all cooling, refrigerating,
        freezing, and other fish holding equipment (blast freezers, plate
        freezers, coolers, or other refrigeration equipment); all fish packaging
        equipment; all fish baskets, totes, tanks, tubs, and other fish holding
        equipment; all ice makers; all hand and power tools; and all office
        equipment, all together with all associated equipment, machinery, parts,
        tools, purse boats, or other items of whatsoever nature and whether
        fixed or unfixed to the aforementioned property securing the Promissory
        Note.

    THIS EXCLUDES ONLY SUCH FIRST UCC SECURITY INTERESTS TO THIRD PARTIES as may
be necessary and appropriate to secure credit from such parties for the specific
purpose of purchasing specific equipment (hereinafter "Purchase-Money
Equipment"). In such cases, the Borrower agrees to the following:

          (a) To give to the Government UCC security interests on the
Purchase-Money Equipment second only to the first interests pledged to the
lenders of the purchase-money (hereinafter the "Purchase-Money UCC security
interests"); and

          (b) That the amount secured by the Purchase-Money UCC security
interests shall not exceed the specific purchase cost of said equipment; and

          (c) The term of the credit secured to buy the Purchase-Money Equipment
(and likewise, the duration of the Purchase-Money UCC security interests) shall
not exceed an ordinarily prudent commercial term; and

          (d) No other Equipment or rights shall be secured by the
Purchase-Money UCC security interests; and

          (e) Upon full repayment of the amounts secured by the Purchase-Money
Equipment, as reflected in the Purchase-Money UCC security interests, these
interests shall be satisfied and the Government's second UCC security interest
will ascend to first priority.


                                       2



<PAGE>


<PAGE>

    THE EQUIPMENT SHALL BE INVENTORIED (sufficiently to describe with certainty
in the senior security agreement and associated UCC filing) and valued by
appraisers acceptable to the Government, all at the Borrower's cost and before
this loan is closed.

    THE UCC SECURITY AGREEMENT SHALL CONTAIN the following provisions:

          (a) That the Government may enter upon any premises where the
Equipment may be located and marshal, secure, protect, and do all things
necessary to preserve the Equipment immediately upon the Borrower's default, but
before any judicial action regarding such default; and

          (b) Such other provisions as the Government deems necessary to protect
its interest; and

          (c) All other parties having a secured interest in the Equipment shall
agree to provisions acceptable to the Government that:

          (i) Recognize the Government's senior interest in, and sole rights to,
the Equipment or the proceeds of the Equipment's liquidation; and

         (ii) Agree not to interfere in any way with, but instead to cooperate
in all reasonable ways with, our entering upon any property owned or leased by
the Borrower in order to marshal, secure, protect, and do all things necessary
to preserve the Equipment.

    2. THE REAL PROPERTY includes:

A Real Estate Mortgage in the full amount of the FOG Debt, on such property as
more fully described in Exhibit 1, attached, owned by Borrower, together with
all improvements thereon which comprise the Borrower's fisheries processing
facilities in Abbeville/Intracoastal City, Louisiana.

    3. THE GUARANTEE: An unconditional guarantee of repayment of the FOG Debt
will be given to the Government by Zapata Protein, Inc. the "Guarantor").

                       ARTICLE III. ADDITIONAL COLLATERAL

   1. Individual Transferable Quotas: Should a limited fisheries access system
be initiated at some future date under which the Borrower is granted a
transferable fishery conservation and management allocation (including, but not
limited to, allocations, permits, quotas, licenses, cage tags, or any other
fisheries access restriction or right, however characterized, of whatsoever
nature) affecting, necessary for, or in any other way, however characterized,
associated with any of the property included in the Collateral, the Borrower
agrees to grant to the Government a full senior security interest in such
allocation by whatsoever means deemed by the Government to be appropriate
(including, but not limited to, the Borrower's execution of security agreements
and the filing of financing statements under the UCC). Further, if the Borrower
fails to do so, the Borrower agrees that the Government may use, for the purpose
of executing and otherwise perfecting whatever documents may be required to
effect the grant to the Government of such a full security interest in such
fisheries conservation and management allocation, the attorney-in-fact authority
conferred upon the Government by ARTICLE XI of this agreement.

   2. OTHER COLLATERAL: Any new, different, substitute or other collateral which
may, from time to time, be provided by Borrower or Guarantor to the Government,
will be subject to all of the covenants and provisions of all of the documents
executed in connection with this transaction, including, but not limited to the
Real Estate

                                       3



<PAGE>


<PAGE>

Mortgage, Ship Mortgage, this Financial Agreement, the Guaranteed Note, the
Promissory Note, and UCC security interests.

             ARTICLE IV. GOVERNMENT'S PRIOR WRITTEN CONSENT REQUIRED

Without the prior written consent of the Chief, Financial Services Division,
National Marine Fisheries Service, which consent will not unreasonably be
withheld: (1) The Borrower may not take any of the following actions; and (2)
The Principal may not take any of the actions listed in Paragraphs 5, 7 and 8,
below.

   1. PAY TO ANY OFFICER, partner, shareholder, or any other person, any salary,
commission, bonus, management fee, dividend or other consideration, however
characterized, in excess of either reasonable industry standards or ordinary
financial prudence for companies of the Borrower's size and financial condition
at the time that such consideration is paid, and Borrower bears the burden of
proving reasonability. It is understood and agreed that the salaries, as
reflected in Schedule A, attached hereto, are deemed to be reasonable.

    2. PURCHASE OR REDEEM ANY SHARES OF ITS OWN STOCK.

    3. MAKE ANY ADDITIONAL INVESTMENT (excluding purchases, etc. in connection
with routine/continuing maintenance and preservation of the Borrower's property
and excluding acquisition of capital assets representing the reinvestment of
involuntary conversion proceeds in assets similar to those in respect of which
the Broorower has received such involuntary proceeds providing such proceeds
are, or are committed to be so reinvested within 90 days after receipt thereof)
in, or incur any additional liability for, the purchase, acquisition, lease, or
other use, however characterized, of any real property, machinery, equipment,
fixtures, 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 five
percent of the Borrower's total assets.

    4. START ANY NEW BUSINESS OR ACQUIRE ANY OTHER BUSINESS, or the assets of
any other business, whether by purchase, merger, consolidation, affiliation, or
any other means, however characterized, whatsoever 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 business.

    5. GUARANTEE OR BECOME CONTINGENTLY LIABLE in any way as surety, endorser,
creditor, co-maker, accommodation maker, or in any other way, however
characterized, for the debt or obligations of any party whatsoever, except as
may be permitted herein or required in the normal course of operations
reasonably necessary to carry on day-to-day business activities.

   6. ALLOW ITSELF TO BE ACQUIRED BY, or otherwise reorganized into, however
characterized, any other Company, unless the acquiring Company or reorganized
entity is reasonably acceptable to the Government and agrees to:

        (a) provide the Government a 100% unconditional guarantee of all debt
actually or contingently owed the Government; and

        (b) be bound by these covenants; and

        (c) be bound by such other covenants as the Government shall reasonably
require to protect its interest; and

        (d) provide the Government such other assurances and security as the
Government may require.

                                       4



<PAGE>


<PAGE>

   7. ESTABLISH ANY TRUST, retirement fund or any other fund, however
characterized, for the benefit of itself or any party, or transfer any monies,
property, or other assets of any kind, however characterized, into any such fund
whether now or hereafter existing (and any such action shall be void and without
effect insofar as the Government's interests are concerned).(2)

   8. TRANSFER ANY MONIES, property, or other assets, however characterized, to
any party by way of gift or by any other means, however characterized, for any
consideration less than payment by such party of the full and fair market value
thereof (and any such action shall be void and without effect insofar as the
Government's interests are concerned); provided, however, that reasonable
transfers not significantly affecting the Borrower's net worth, and not
inconsistent with the Borrower's or the Principal's obligation to protect the
Government from loss by preserving its net worth, shall be exempted.

    9. MAKE ANY DISTRIBUTION OF BORROWER'S ASSETS for compensation (including
salaries, withdrawals, fees, bonuses, commissions, drawing accounts, and other
payments, whether directly or indirectly, in money or otherwise hereinafter
"compensation") 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
Guarantee. In the event an Affiliate increases the compensation 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.

                  ARTICLE V. BORROWER'S OBLIGATIONS & COVENANTS

The Borrower shall be bound by and do, perform or discharge all of the following
actions.

    1.  MAINTAIN  FINANCIAL  RATIOS  AS  FOLLOWS:

        (a)  A current ratio of at least 1.25:1.

        (b)  Debt to Equity ratio of not more than 2:1.

    2. NOTICES TO THE GOVERNMENT: Within ten (10) days of its occurrence,
Borrower and the Guarantor must give the Government written notice of any of the
following:

    (a) Any pending litigation, business reverse, casualty, loss, or any other
matter which diminishes:

        (i)   its ability to service any debt actually or contingently owed the
              Government; or

        (ii)  its ability to perform any other duty or obligation owed the
              Government; or

        (iii) its ability to fully and faithfully perform any covenant with the
              Government; or

        (iv)  the value of any property or other assets pledged to the
              Government;

- -------------------
(2) This provision excludes contributions, not exceeding $2,000 per year per
person, to any such party's IRA, Keough, or 401K account. Written approval must
be obtained from the Government in advance, for any contributions in excess of
$2,000 per year per person to any other retirement account, and any
contributions in any amount to any trust or other funds of whatsoever kind.


                                       5



<PAGE>


<PAGE>

              or

        (v)   the net worth of any party against whom the Government has
              recourse for this debt.

    (b) The institution of any suit, which demands $100,000 or more, against the
Borrower or others deemed by the Government to affect adversely its interest
hereunder, in the Note or otherwise.

      ARTICLE VI. FINANCIAL REPORTING TO AND INSPECTIONS BY THE GOVERNMENT

    1. BORROWER AGREES TO PROVIDE THE GOVERNMENT AT THE END OF EACH QUARTER of
its tax or accounting years, a certified correct copy of:

        (a)  a balance sheet; and

        (b)  an income and expense statement for the preceding twelve months;
and

        (c)  an aging report of all receivables outstanding; and

        (d) an inventory report for all inventory maintained at the end of each
year.

    2. CERTIFICATION OF FINANCIAL INFORMATION: Borrower agrees that:

           QUARTERLY: At the end of each quarter of Borrower's accounting or tax
           years, Borrower's Chief Financial Officer shall certify the
           correctness of Items VI 1(a) through (d), listed above.

           ANNUALLY: At the end of each fiscal year, said items, [VI, 1(a)
           through (d)] will be compiled by independent certified public
           accountants who are acceptable to the Government.

           ALL QUARTERLY AND ANNUAL financial reports required hereunder shall
           include a certification from the Borrower's Chief Financial Officer
           that either:

        (a) There has been no default, as provided by the security instruments,
during the reporting period; or

        (b) There has been a default, as provided by said security instruments,
during the reporting period. In this case the nature, extent, prospective
consequences, and all other relevant details of such default shall be fully set
forth in such certification.

   3. INCOME TAX RETURNS: All tax returns shall be timely filed(3) and a copy of
Borrower's Federal Income Tax Return, along with all supporting schedules, must
be delivered to the Government within 15 days of its filing or issuance.
Borrower agrees to execute a consent and waiver, valid so long as Borrower owes
a debt to the Government, which allows the Internal Revenue Service to release
directly to the Government, Borrower's Federal Income Tax Returns, whenever the
Government requests same.(4)

   4. BORROWER TO DELIVER ALL REQUIRED FINANCIAL STATEMENTS, notices, returns or
reports to the Government's Southeast Regional Financial Services Branch. All

- -------------------
(3) Timely filing shall include valid extensions filed with the Internal Revenue
Service.
(4) Borrower agrees to execute IRS Form Nos. 4506 and 8821, thereby implementing
the provision of 26 USC 'SS'6103(c).


                                       6



<PAGE>


<PAGE>

financial statements shall be delivered within 90 days of the close of the
fiscal or accounting year, or such quarter in such year, to which they relate.

    5. METHOD OF BOOKKEEPING: Borrower will, at all times, keep proper books of
account in a manner satisfactory to the Government, including financial and
operating statements including schedules showing all compensation paid by the
Borrower.

   6. GOVERNMENT INSPECTIONS: Permit the Government, or any representative
selected by the Government, in such manner and at such times as the Government
may require, to (a) make inspections and audits of any books, records, papers,
or other documents(5) of whatsoever nature in the custody and control of the
Borrower, Guarantor, or any other entity, relating in any way to the financial
or business condition or prospects of the Borrower, or Guarantor, including the
making of copies thereof and extracts therefrom, and (b) make inspections and
appraisals of any of the Borrower's or Guarantor's physical assets.

   7.  BORROWER TO PAY THE COST OF ALL SUCH INSPECTIONS:  The cost of annual
inspections, audits, or appraisals shall be paid by the Borrower.

    8. GUARANTOR'S OBLIGATIONS: Paragraphs 3, 4, and 6, above, of this ARTICLE
VI, apply to the Guarantor. Additionally, the Guarantor shall provide to the
Government, at the end of each tax year, a certified correct copy of their
Statement of Financial Condition, and if applicable, their SEC-10K Report.

                           ARTICLE VII. GUARANTEE FEES

    1. THE BORROWER AGREES TO PAY TO THE GOVERNMENT the amount required for the
payment of each Guarantee fee at the rate of 1% per year, first, on the date
hereof and, thereafter, at least sixty (60) days prior to each anniversary date
of the Ship and Real Estate Mortgages. In the event the Government at any time
determines and gives notice to the Borrower that the amount of any fee paid
under the Guarantee is not correct the Borrower shall within thirty (30) days
after receipt of such notice pay the Government the amount of any deficiency
specified in said notice. In the event that the fee paid by the Borrower to the
Government is in excess of the amount required by the Guarantee, such excess
shall be credited to the account of the Borrower. In the event that Borrower
fails to pay a Guarantee fee, said fee shall be deemed to be an indebtedness of
the Borrower and shall be secured by this Ship and Real Estate Mortgages 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.

    2. ALL FEES SHALL BE PAID BY THE DELIVERY by the Borrower to the Government
in person or by mail addressed to the Government, as it may from time to time
specify, by check or money order in the required amount payable to the order of
the Government, as it may from time to time specify, together with
identification of the specific Guarantee to which the fee relates and the period
covered by the payment.

    3. THE BORROWER AGREES THAT ALL AMOUNTS PAID BY IT IN ACCORDANCE WITH THIS
SECTION SHALL BE AS FOLLOWS:

          (a) THE FEE REQUIRED FOR THE GUARANTEE shall be computed on the
average principal amount of the the Ship Mortgage and Note outstanding during
the annual period covered by said fee. Such computation of average principal
amount outstanding shall take into account the fixed payments required under the
Ship Mortgage and Note.

- -------------------
(5) Including but not limited to off-loading receipts, fish-sale receipts,
business transaction journals, etc.

                                       7



<PAGE>


<PAGE>


          (b) FEES SHALL BE SUBJECT TO REDUCTION for erroneous calculations, for
voluntary prepayments made under the Ship Mortgage and Note, and for
extraordinary payments made under the Ship Mortgage and Note, such as proceeds
of insurance upon total loss applied in reduction of principal and additional
payments contingent on earnings. Fees shall be subject to increase for erroneous
calculations and for payments required under the Ship Mortgage and Note, which
are delinquent.

          (c) THE PAYMENT OF THE INITIAL FEE is being made to the Government
concurrently with the execution and delivery of the Ship and Real Estate
Mortgages, the receipt whereof by the Government is hereby acknowledged, and
covers a twelve-month period commencing with the date hereof.

          (d) EACH FEE SHALL BE DEEMED TO BE FULLY EARNED as of the commencement
of the period to which it is applicable. No refund will be made by the
Government of the initial fee paid or of any subsequent annual fee, or deficient
fee applied in payment in accordance with this SECTION in the event the
Guarantee shall terminate, except as provided in this SECTION.

          (e) IN THE EVENT THE GUARANTEE SHALL TERMINATE, the obligation to pay
further fees hereunder (other than deficient fees) shall cease as of the time of
such termination. If payment under the Guarantee shall have been properly
demanded and shall not have been made, for any reason (other than under the
conditions under which the Government is not required to make payment under the
Guarantee) within the thirty-day period from proper demand the obligation to pay
further premium charges hereunder (other than deficient premium charges) shall
cease as of the last time the Government shall have been obligated to make
payment under the Guarantee.

          (f) IF AT THE TIME OF TERMINATION of the Guarantee the Government
holds any excess fee or any annual fee which has not been applied in payment in
accordance with this SECTION (or the time for application of which has not
arrived), such excess fee shall be (i) refunded to the Borrower if the Guarantee
shall terminate pursuant to payment in full of the Ship Mortgage and Note and
(ii) retained by the Government as collateral security for the payment of the
Ship and Real Estate Mortgages and Notes, and any sum due to the Government if
the Guarantee shall terminate pursuant to payment of the Guarantee by the
Government or if there is a failure of the holder of the Guaranteed Note to
properly demand payment of the Guarantee from the Government within 60 days of
notification of a default under the Ship Mortgage by the Government and the
Guarantee is terminated. If payment of the Guarantee shall have been demanded
and shall not have been made, for any reason (other than under the conditions
under which the Government is not required to make payment of the Guarantee)
within the thirty-day period therefor, any excess fee or any annual fee which
has not been applied in payment in accordance with this SECTION (or the time for
application of which has not arrived), as of the time the Government shall have
been obligated to make payment under the Guarantee, shall be retained by the
Government as indemnity.

                      ARTICLE VIII. LOUISIANA LAW TO GOVERN

   To the extent not governed by the laws of the United States, all provisions
of this Financial Agreement shall be construed, given effect, and enforced
according to the laws of the State of Louisiana. With respect to any claim or
proceeding relating to this Financial Agreement, the Borrower and Guarantor
hereby consent to and subject themselves to the jurisdiction of the state and
federal courts located in the State of Louisiana, and agree that the venue of
any action or proceeding relating to this Financial Agreement shall lie
exclusively in said state.

                               ARTICLE IX: DEFAULT

    1. THE OCCURRENCE OF ANY OF THE FOLLOWING CONSTITUTES AN EVENT OF DEFAULT:

                                       8



<PAGE>


<PAGE>



        (a) ANY FAILURE TO OBSERVE, PERFORM, COMPLY WITH AND DISCHARGE ALL OF
THE COVENANTS, CONDITIONS, AND OBLIGATIONS WHICH ARE IMPOSED ON:

            (i) BORROWER by this Title XI Financial Agreement, the Promissory
Note, dated September 27, 1994, the Ship and Real Estate Mortgages, dated
September 27, 1994, and any other agreement or document executed in connection
with this Financial Agreement and the Note, concurrently or otherwise, inclusive
of amendments thereto, in connection with this Financial Agreement, or
subsequent amendment or agreement, regardless of whether or not the Borrower
shall be a party to said agreement or document, and such default shall continue
for fifteen (15) days; or

            (ii) ANY GUARANTOR by any Guaranty Agreement, whether or not the
Borrower is party to said agreement and such default shall continue for fifteen
(15) days; or

        (b) ANY FAILURE TO PAY OR MAKE PAYMENTS ON:

            (i) INTEREST ON THE NOTE OR THE GUARANTEED NOTE when and as the same
shall become due and payable as therein provided and such default shall continue
for fifteen (15) days; or

            (ii) PRINCIPAL OF THE NOTE OR THE GUARANTEED NOTE when and as the
same shall become due and payable, whether at maturity, by notice of
acceleration, or otherwise and such default shall continue for fifteen (15)
days; or

            (iii) GUARANTEE FEES as required by ARTICLE VII of this document and
such default shall continue after ten (10) days written notice; or

        (c) FINANCIAL EVENTS:

            (i) Borrower makes a general assignment for the benefit of the
Borrower's creditors; or

            (ii) Borrower loses the right to do business, by forfeiture or
otherwise; or

            (iii) A receiver or receivers of any kind whatsoever, whether
appointed or not, in admiralty, bankruptcy, common law, or equity proceedings,
and whether temporary or permanent, shall be appointed for all property of the
Borrower; or

             (iv) A PETITION OR OTHER PROCEEDING OR ACTION IN BANKRUPTCY,
regarding the Borrower, is filed by the Borrower or by creditors of the
Borrower; or

        (d) FAILURE TO MAINTAIN ANY OF THE INSURANCE COVERAGE as outlined in
Article II, Section 2, INSURANCE REQUIREMENTS, found on pages 4 and 5 of the
First Preferred Ship Mortgage.

        (e) A MATERIAL MISREPRESENTATION OR UNDISCLOSED FACT, made or omitted in
any application, agreement, affidavit, or other document, submitted in
connection with the Guarantee, on behalf of, or for the benefit of, or by the
Borrower; or

        (f) INSTITUTION OF ANY SUIT AGAINST THE BORROWER or others deemed by the
Government to affect adversely its interest hereunder, in the Note or otherwise;

        (g) IMPAIRMENT OF ANY OTHER COLLATERAL.

    2. GOVERNMENT ACTIONS UPON OCCURRENCE OF AN EVENT OF DEFAULT, whether or not
the Guaranteed Note has been paid to the Bank by the Government, the Government
may, in

                                       9



<PAGE>


<PAGE>


the Government's discretion, so long as such event of default shall be
continuing, do any or all of the following:

        (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 18 percent
per year unless such would violate the usury laws of the state where the Note
and the Guaranteed Note are executed, in which case the maximum legal rate of
that state shall prevail; and/or

        (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, or otherwise
hereunder, and collect the same out of any and all property of the Borrower;
and/or

        (c) FORECLOSE THE SHIP AND REAL ESTATE MORTGAGES AND SELL any real
property which secures the FOG Debt; and/or

        (d) TAKE POSSESSION OF ALL OF THE LEASEHOLD PROPERTY and improvements,
including, but not limited to the buildings, fixtures and Equipment, purse
boats, seines, thereon, and/or

        (e) SELL OR OTHERWISE DISPOSE OF THE LEASEHOLD PROPERTY and improvements
thereon, described in sub-paragraph (d), above; and/or

        (f) RETAKE AND/OR SELL THE EQUIPMENT WITHOUT LEGAL PROCESS as provided
by the Ship and Real Estate Mortgages, or any other document which has been
executed by or on behalf of the Borrower; and/or

        (g) OVERDUE GUARANTEE FEES shall, beginning with the first day such
guarantee fees are due but unpaid, be added to the principal of the Promissory
Note, earn interest at the same rate as specified in the Promissory Note for
overdue principal, and be secured by all of the collateral and security
instruments. This provision will not be deemed a waiver of any of the
Government's rights or other remedies, as set out above, and elsewhere, and such
overdue guarantee fees shall remain due and payable as originally scheduled.

                 ARTICLE X. TITLE XI FINANCIAL AGREEMENT GOVERNS

    To the extent that any of the terms and conditions of this Financial
Agreement are inconsistent or in contradiction with the terms and conditions of
any other agreement between the Government and the Borrower, including but not
limited to previously executed Title XI financial agreements, then the terms of
this Financial Agreement shall govern, otherwise, all such terms and conditions
of such other agreements will continue with full force and effect.

                          ARTICLE XI. POWER OF ATTORNEY

    Borrower hereby irrevocably appoints the Government the true and lawful
attorney of the Borrower, in its name and stead to execute any other document
necessary to perfect the Government's security interests regarding this
transaction and/or all aspects of the FOG Debt.

    IN WITNESS WHEREOF, the Borrower has executed this Title XI Financial
Agreement the day and year first above written.

                               GOVERNMENT:

                               UNITED STATES OF AMERICA
                               Secretary of Commerce

                                       10



<PAGE>


<PAGE>



                               National Oceanic and Atmospheric Administration

                               _________________________________________________
                               Chief, Financial Services Branch
                               Southeast Region
                               National Marine Fisheries Service


                                       11


<PAGE>


<PAGE>



ATTEST:                                BORROWER:   Zapata Protein (USA), Inc.

By: _____________________              By: _____________________________________

Title: Secretary                       Title: Vice President and Controller
Date: September 27, 1994


ATTEST:                                GUARANTOR:   Zapata Protein, Incorporated


By: _____________________              By: _____________________________________
Title: Secretary                       Title: Executive Vice President-

                                              Finance and Administration

Date: September 27, 1994

                                       12



<PAGE>





<PAGE>

Case Nos. OG-G-862 and 863

                               SECURITY AGREEMENT

        This is a Security Agreement between Zapata Protein (USA), Inc.,
("Debtor") and the United States of America ("Secured Party").

                                    RECITALS

        Debtor and certain other persons have entered into a Title XI Financial
Agreement with Secured Party dated this date (the "Financial Agreement"). Words
which are capitalized herein and in the attached Exhibit A which are defined in
the Financial Agreement shall have the same meanings as given in the Financial
Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants contained in
the Financial Agreement, the parties do hereby agree as follows:

        1. Grant of a Security Interest. In order to secure the payment of the
Promissory Note, Debtor does hereby grant Secured Party a security interest in
the collateral described on Exhibit A hereto ("Collateral").

        2. Indebtedness Secured. This Security Agreement shall secure the
payment of all amounts owing under the Promissory Note and all other amounts
owed by the Debtor to the Secured Party.

        3. Events of Default. All of the events of default enumerated in the
Financial Agreement shall constitute events of default under this Security
Agreement, and the effect of the occurrence of any event of default shall have
the same effect specified in the Financial Agreement. Secured Party shall have
all the rights and remedies available to Secured Party under the Virginia
Business and Commerce Code and such other rights and remedies as are available
under applicable law, subject to the provisions of the Financial Agreement.
Immediately upon the occurrence of an event of default, but before any judicial
action regarding such default, Secured Party may enter upon any premises where
the Collateral may be located and marshal, secure, protect, and do all things
necessary to preserve the Collateral.

        4. Financial Agreement Governs. In the event of a conflict between the
Financial Agreement and this Security Agreement, the Financial Agreement shall
control. Specifically, and without limiting the foregoing, the terms of the
security interest granted hereunder are subject to the provisions of Article II,
Section 4 of the Financial Agreement.

        DATED: September 27, 1994

                              Zapata Protein (USA), Inc.

                          By: 
                              -------------------------------------------------
                              Vice President and Controller

                              UNITED STATES OF AMERICA

                          By: 
                              -------------------------------------------------
                              Name:     Thomas S. Allen
                              Title:    Chief, Financial Services Branch
                                        Southeast Region
                                        NOAA, National Marine Fisheries Service



<PAGE>





<PAGE>

                    UNITED STATES GUARANTEED PROMISSORY NOTE

City and State St. Petersburg, Florida                     No. B-9723
Date  October 30, 1996                                     Case No. OG-G-864

THIS IS A PROMISSORY NOTE GUARANTEED BY THE UNITED STATES OF AMERICA (THE
"NOTE").

THIS NOTE WILL BE PAID BY Zapata Protein (USA), Inc., 3840 Highway 22,
Mandeville, Louisiana 70471 (THE "PAYOR").

THIS NOTE WILL BE PAID TO Coastal Securities at 1160 Dairy Ashford, Suite 500,
Houston, Texas 77070-3010 (THE "PAYEE").

THIS NOTE'S PRINCIPAL AMOUNT IS One Million Eight Hundred Forty-eight Thousand,
Five Hundred Sixty-Two dollars ($1,848,562.00) (THE "PRINCIPAL").

THIS NOTE'S INTEREST RATE IS Seven and Seventeen One Hundredths percent (7.17%)
APR (THE "INTEREST RATE").

THIS NOTE'S PAYMENT PROVISIONS ARE Fifty Thousand Five Hundred Forty-two Dollars
($50,542) including principal and interest quarterly, with the balance of
principal and interest due fifteen (15) years from the date of this Note. The
first quarterly payment shall be due three (3) months from the date of this Note
and each quarterly payment thereafter shall be due on the date of the month that
the first quarterly payment is due hereunder (THE "PAYMENT PROVISIONS").

THIS NOTE MAY BE PREPAID without penalty after five years from the date of
execution. The Payor consents to pay to the Payee a prepayment penalty during
the first five years of loan life as follows: 5% of any principal prepaid during
the first year; 4% the second year; 3% the third year; 2% the fourth year; and
1% the fifth year.

        PAYEE HEREBY LENDS THE PRINCIPAL TO PAYOR. PAYOR HEREBY ACKNOWLEDGED
RECEIPT OF THE PRINCIPAL FROM PAYEE. FOR VALUE RECEIVED, PAYOR PROMISES TO PAY
THE PRINCIPAL TO THE ORDER OF PAYEE WITH INTEREST AT THE INTEREST RATE AND IN
ACCORDANCE WITH THE PAYMENT PROVISIONS. PAYMENT SHALL BE AT PAYEE'S ADDRESS
ABOVE UNLESS PAYEE DESIGNATES IN WRITING A DIFFERENT ADDRESS.

        INTEREST SHALL APPLY TO ALL UNPAID PRINCIPAL FROM THE DATE OF THIS NOTE.
INTEREST IS SIMPLE INTEREST. INTEREST SHALL ACCRUE ON THE BASIS OF 30-DAY MONTHS
AND 360-DAY YEARS.

        ALL PAYMENT ON THIS NOTE SHALL FIRST BE APPLIED TO ACCRUED INTEREST. ANY
REMAINDER SHALL BE APPLIED TO THE PRINCIPAL.

        PAYEE MAY DECLARE THE FULL UNPAID AMOUNT OF THIS NOTE IMMEDIATELY DUE
AND PAYABLE AT ANY TIME PAYOR FAILS TO KEEP HIS PROMISE. THE PAYOR'S PROMISE IS
UNCONDITIONAL. PAYOR'S OBLIGATION UNDER THIS NOTE SHALL NOT BE IMPAIRED BY
PAYEE'S INDULGENCE. THIS NOTE IS THE ENTIRE CONTRACT BETWEEN PAYOR AND PAYEE.
PAYOR'S OBLIGATION IS JOINT AND SEVERAL IF MORE THAN ONE PARTY IS INVOLVED.

        THIS IS THE NOTE REFERRED TO IN THE GUARANTEE APPEARING AT THE BOTTOM OF
THIS DOCUMENT.

Attest:                                    Zapata Protein (USA), Inc.
- --------------------------------------     ------------------------------------

By:                                        By:
- --------------------------------------     ------------------------------------

Secretary                                  Vice President and Controller
- --------------------------------------     -------------------------------------

================================================================================

                    GUARANTEE OF THE UNITED STATES OF AMERICA

             THIS IS A GUARANTEE OF THE NOTE APPEARING AT THE TOP OF THIS
DOCUMENT (THE "GUARANTEE").

             THE GUARANTOR IS THE UNITED STATES OF AMERICA, ACTING BY AND
THROUGH THE SECRETARY OF COMMERCE (THE "GUARANTOR").

             THE PAYEE IS THE SAME AS IN THE NOTE.

             GUARANTOR HEREBY PLEDGES ITS FULL FAITH AND CREDIT TO PAYMENT
IN FULL OF THE NOTE. ALL UNPAID PRINCIPAL AND INTEREST (INCLUDING INTEREST
THROUGH THE DATE OF GUARANTOR'S PAYMENT) IS HEREBY GUARANTEED. THE VALIDITY OF
THIS GUARANTEE IS INCONTESTABLE AS TO ANY LAWFUL HOLDER OF THE NOTE.

             THIS GUARANTEE IS SUBJECT TO THE CONDITIONS APPEARING ON THE BACK
OF THIS DOCUMENT.

             THE DATE OF THIS GUARANTEE IS THE SAME AS IN THE NOTE.

                            UNITED STATES OF AMERICA                         
                            SECRETARY OF COMMERCE                             
                                                                             
                            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION   
                                                                             
                            -----------------------------------------         
                            CHIEF, FINANCIAL SERVICES BRANCH                  
                            SOUTHEAST REGION                                  
                                                                             
                            -----------------------------------------         
                            NATIONAL MARINE FISHERIES SERVICE                 
                                                                             
================================================================================




<PAGE>





<PAGE>



NOAA FORM 88-70                                     U. S. DEPARTMENT OF COMMERCE
(4-74)                           NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Case No. OG-G-864

                 PROMISSORY NOTE TO THE UNITED STATES OF AMERICA

                                         City and State: New Orleans, Louisiana
                                         Date: October 30, 1996

     FOR VALUE RECEIVED, the undersigned (the "Payor") promises to pay to the
order of the UNITED STATES OF AMERICA, acting by and through the Secretary of
Commerce (the "Payee"), at the office of the Financial Services Division,
National Marine Fisheries Service, National Oceanic and Atmospheric
Administration, Silver Spring, Maryland, or at the Payee's option, at such other
place as may be designated from time to time by Payee, the principal amount of
ONE MILLION EIGHT HUNDRED FORTY-EIGHT THOUSAND, FIVE HUNDRED SIXTY-TWO DOLLARS
($1,848,562.00) with interest on the unpaid principal computed from the date
hereof at the rate of Seven and Seventeen One Hundredths percent (7.17%) per
year, payment to be made in installments as follows:

     Fifty Thousand Five Hundred Forty-two Dollars ($50,542.00) including
     principal and interest quarterly, with the balance of principal and
     interest due fifteen (15) years from the date of this Note. The First
     quarterly payment shall be due three (3) months from the date of this Note
     and each quarterly payment thereafter shall be due on the date of the month
     that the first quarterly payment is due hereunder.

     This Note is given in consideration of, pursuant to the provisions of Title
XI of the Merchant Marine Act, 1936, as amended, the guaranteeing payment of the
unpaid interest on and the unpaid balance of the principal of a certain
promissory note (the "Guaranteed Note") issued by the Payor to Coastal
Securities on the date hereof to secure payment by the Payor to the Payee of any
amount that the Payee may be required to pay to the holder of the Guaranteed
Note, or any other amounts that are owed to the National Marine Fisheries
Service as a result of this transaction.

     This Note has been negotiated and received by the Payee subject to and
secured by the terms of a Deed of Trust and Security Agreement (hereinafter the
"Deed of Trust and Security Agreement") covering certain property in
Northcumberland County, Commonwealth of Virginia.

     The condition of this Note is such that so long as the Guaranteed Note is
outstanding and until the Guarantee contained within the Guaranteed Note shall
have been terminated pursuant to the provisions of the Deed of Trust and
Security Agreement and the agreement governing such Guarantee (the "Guarantee
Agreement"), the principal of, and the interest on this Note in respect of the
Guaranteed Note shall be payable as follows:

     (1) by payment of the interest on such Guaranteed Note and by amortization
of the principal of the Guaranteed Note according to the terms of the Guaranteed
Note;

     (2) when such Guaranteed Note has been retired or paid other than by
payment of the Guarantee; and the aforesaid payments shall constitute payment of
the principal of, and the interest on this Note as of the date on which and to
the extent such payment is made, and this Note shall be discharged to the extent
of such payment of principal.




<PAGE>


<PAGE>


     The principal of this Note and the interest thereon may be declared or may
become due and payable by the declaration of the Payee without demand,
presentment, opportunity to cure, or notice of intent to accelerate, at any time
after, (l) the holder of the Guaranteed Note shall have demanded payment of the
Guarantee pursuant to the provisions of the Guarantee Agreement, subject to such
demand for payment of the Guarantee and its consequences being annulled under
certain circumstances, or (2) the Payee has notified the holder of the
Guaranteed Note by the issuance of the Payee's notice of the occurrence of an
Event of Default pursuant to the provisions of the Deed of Trust and Security
Agreement and Guarantee Agreement and said holder has demanded payment of the
Guarantee. Thereupon, the principal of and the interest on this Note shall
become immediately due and payable together with interest and at the accelerated
rate of eighteen (18) percent per annum.

     This Note is not negotiable, assignable, or transferable without the
written consent of the Payee. This Note shall be cancelled by the Payee and
surrendered to the Payor if all outstanding obligations accruing hereunder,
under the Guaranteed Note, the Deed of Trust and Security Agreement, or any
other documents accociated with this transaction are paid.

     The undersigned shall pay all expenses of any nature, whether incurred in
or out of court, and whether incurred before or after this Note shall become due
at its maturity date or otherwise, including but not limited to reasonable
attorney's fees and costs, which Payee may deem necessary or proper in
connection with the satisfaction of the Note or the administration, supervision,
preservation, protection (including, but not limited to, the maintenance of
adequate insurance) of any and all Collateral that secures this transaction. The
Payee is authorized to pay, at any time and from time to time, any or all of
such expenses, add the amount of such payment to the principal amount of the
Note and Deed of Trust and Security Agreement, and charge interest thereon at
the rate specified herein with respect to interest on the principal amount of
this Note, and upon acceleration of sums due hereunder, at the accelerated rate.

     The term "Collateral" as used in this Note shall mean any funds,
guaranties, or other property or rights therein of any nature whatsoever or the
proceeds thereof which may have been, are, or hereafter may be hypothecated,
directly or indirectly by the undersigned or others, in connection with, or as
security for, this Note or any part hereof.

     The obligation of the undersigned hereunder shall not be impaired by the
Payee's indulgence, including, but not limited to (a) any renewal, extension, or
modification which the Payee may grant with respect to the Note or any part
hereof, (b) any surrender, compromise, release, renewal, extension, exchange, or
substitution, which the Payee may grant in respect of the said Deed of Trust and
Security Agreement, as amended, or other Collateral, or (c) any indulgence
granted in respect of any endorser, grantor, or insurer.

     When applicable, the obligation of the undersigned hereunder shall be joint
and several.

                                         ZAPATA PROTEIN (USA), INC.
                                         Payor


                                         By:
                                            ----------------------------------
                                            Clyde R. Gilbert
                                            Vice President and Controller

ATTEST:


- ---------------------------------------
Sharon M. Brunner, Assistant Secretary

(SEAL)

                                       2



<PAGE>





<PAGE>

Case No. OG-G-864

                               GUARANTY AGREEMENT

        THIS GUARANTY AGREEMENT, is made and entered into by Zapata Protein,
Inc. (the "Guarantor"), and the UNITED STATES OF AMERICA, acting by and through
the Secretary of Commerce (the "Secretary").

        Heretofore the Secretary has made, entered into, and delivered a certain
Commitment to Guarantee Note (the "Commitment"), dated January 28, 1988, as
amended on November 15, 1988, the Commitment to Guarantee Note executed on
November 22, 1988, and further amended by an Approval Letter dated October 11,
1996, and such Commitment has been accepted by Zapata Protein (USA), Inc., (the
"Payor"). The Guarantor is advised that the Commitment contemplates the issuance
of an obligation in the amount of $1,848,562.00 by the Payor to Coastal
Securities (the "Payee") which will be guaranteed by the Secretary (the
"Guaranteed Note"). The consideration for the Guaranteed Note is a loan from the
Payee to the Payor. The Commitment also contemplates the issuance of a
promissory note by the Payor (the "Note") which will be secured by a Deed of
Trust and Security Agreement from the Payor to the Secretary to be executed and
delivered by the Payor to the Secretary (the "Deed of Trust and Security
Agreement"). The consideration for the Note and Deed of Trust and Security
Agreement is the Secretary's guarantee contained in the Guaranteed Note.

        The Guarantor understands that the Secretary is unwilling to enter into
the aforementioned transaction unless payment pursuant to the Note and Deed of
Trust and Security Agreement shall be guaranteed unconditionally by the
Guarantor. This Guaranty Agreement is executed and delivered by the Guarantor in
order to induce the Secretary to enter into the aforementioned transaction with
the Payor and Payee.

        NOW, THEREFORE, in consideration of the premises and the mutual promises
of the Guarantor, the Guarantor (jointly, severally and in solido, if the
Guarantor consists of more than one person or entity) agrees with and
unconditionally guarantees to the Secretary the following:

         1. The Guarantor unconditionally guarantees that all sums stated in
either the Note or the Deed of Trust and Security Agreement to be payable to the
Secretary, and all other indebtedness of the Payor to the Government presently
existing or which may in any manner or means hereafter be incurred, including
any further loans and advances made to Payor by the Government under the
provisions hereof, shall be promptly paid in full when due, in accordance with
the provisions governing such payment. This Guaranty is unconditional and
absolute and if for any reason such sums, or any part thereof, shall not be paid
promptly when due, the Guarantor will immediately pay the same to the Secretary
pursuant to the provisions governing such payment, regardless of any defenses or
rights of setoff or counterclaims which the Payor may have or assert, and
regardless of whether the Payee or the Secretary shall have taken any steps to
enforce any rights against the Payor or any other person to collect such sums,
or any part thereof, and regardless of any other condition or contingency. The
Guarantor also agrees to pay the Secretary the costs and expenses of collecting
such sums, or any part thereof, or of enforcing this Guaranty Agreement,
including attorneys' fees.

         2. The Guarantor unconditionally guarantees that the Payor will
promptly and punctually pay all other sums payable under either the Note or the
Deed of Trust and Security Agreement, and will duly perform and observe each and
every agreement, covenant, term, and condition in such Note and Deed of Trust
and Security Agreement to





<PAGE>


<PAGE>


be performed or observed by the Payor, and upon the Payor's failure to do so,
the Guarantor will promptly pay such sums and duly perform and observe each such
agreement, covenant, term and condition, or cause the same promptly to be
performed and observed.

         3. The obligations, covenants, agreements and duties of the Guarantor
under this Guaranty Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following with respect to the
Note or the Deed of Trust and Security Agreement, although without notice to or
the further consent of the Guarantor:

             (a) The waiver by the Payee or the Secretary, or the successors or
assigns of either of them, of the performance or observance by the Payor or the
Guarantor of any of the agreements, covenants, terms or conditions contained in
either of such instruments;

             (b) The extension, in whole or in part, of the time for payment by
the Payor or the Guarantor of any sums owing or payable under either of such
instruments, or of the time for performance by the Payor or the Guarantor of any
other obligations under or arising out of or on account of either of such
instruments;

             (c) The modification or amendment (whether material or otherwise)
of any of the obligations of the Payor or any of the Guarantor as set forth in
either of such instruments;

             (d) The doing or the omission of any of the acts referred to in
either of such instruments;

             (e) Any failure, omission, or delay of the Payee or the Secretary
to enforce, assert, or exercise any right, power or remedy conferred on the
Payee or the Secretary in each of such instruments, or any action on the part of
the Payee or the Secretary granting indulgence or extension in any form
whatsoever;

             (f) The voluntary or involuntary liquidation, dissolution or sale
of all or substantially all of the assets, the marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition, or readjustment of, or
other similar proceeding affecting the Payor or any of its assets; and

             (g) The release of the Payor or the Guarantor or any of them from
the performance or observance of any of the agreements, covenants, terms or
conditions contained in either of such instruments by the operation of the law.

             (h) Any Order or Judgment entered by a Bankruptcy Court which
diminishes, discharges or declares any of the obligations or amounts owed under
the Note and Deed of Trust and Security Agreement to be paid or satisfied. The
undersigned hereby waive any defense based upon any Bankruptcy Court order or
judgment with respect to any action based upon this Guaranty Agreement, which is
brought against the undersigned in Federal District Court.

             (i)  The assumption and/or refinancing of the underlying 
indebtedness by a third party.

         4. Notice of acceptance of this Guaranty Agreement and notice of any
obligations or liabilities contracted or incurred by the Payor are hereby waived
by the Guarantor.


                                       2


<PAGE>


<PAGE>


         5. This Guaranty Agreement may not be modified or amended except by a
written agreement executed by the Guarantor with the consent in writing of the
Secretary.

         6. This Guaranty Agreement may be assigned to any holder of the Note
and the Deed of Trust and Security Agreement.

         7. All agreements, covenants, terms and conditions in this Guaranty
Agreement shall inure to the benefit of the Secretary and his successors and
assigns, and, without limitation of the generality of the foregoing, shall in
particular inure to the benefit of any holder of the Note and Deed of Trust and
Security Agreement.

         8. The signature of the Guarantor hereto is, in addition to and not in
limitation of the foregoing, intended as and to have the effect of an
endorsement of the Note by the Guarantor, who hereby waives presentment, demand
of payment, opportunity to cure, notice of intent to accelerate, protest and
notice of nonpayment or dishonor, and of protest of the Note and any and all
other notices and demands whatsoever.

         9. The terms of this Guaranty Agreement shall apply to the Note and to
the Deed of Trust and Security Agreement and shall bind the Guarantor to the
same extent as though each of them executed and delivered a separate instrument
of guaranty with respect to each of such instruments and annexed the same
thereto.

        10. This Guaranty shall be binding upon the Guarantor and the
Guarantor's heirs, executors, administrators, successors, assigns and other
legal representatives.

        11. Prior written consent must be granted by the Secretary, consent of
which will not be unnecessarily withheld, before the Guarantor shall split-up,
split-off, spin-off, merge, consolidate, or transfer or allow transfer of its
shares and/or assets as to effect a change in its controlling interest,
management, and financial conditions.

         12. If the Guarantor is a corporation, this Guaranty Agreement shall be
binding upon its parent corporation and its subsidiaries.

         13. SEVERABILITY: The unenforceability or invalidity of any
provision(s) of this Guaranty Agreement shall not render any other provision(s)
herein unenforceable or invalid.

        IN WITNESS WHEREOF, the undersigned have executed and delivered this
Guaranty Agreement.

Date: October 30, 1996

Attest:                                     GUARANTOR:  Zapata Protein, Inc.

By:                                         By:
   ----------------------                      --------------------------------
   Assistant Secretary                         Vice President and Assistant
                                               Secretary

(SEAL)

                                       3


<PAGE>


<PAGE>



                                 ACKNOWLEDGMENT

STATE OF FLORIDA            )
                            ) ss
COUNTY OF PINELLAS          )

         On the 30th day of October, 1996, before me appeared Joseph L. von
Rosenberg III, personally known to me or who has produced 
               as identification, who being by me duly sworn, did depose and say
that he is the Vice President and Assistant Secretary of Zapata Protein, Inc.,
the corporation described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is the seal of said corporation; that said seal was so affixed by order of the
Board of Directors of said corporation, and that he signed his name to said
instrument by like order, and the said Joseph L. von Rosenberg III acknowledged
to me that he executed said instrument as the Vice President and Assistant
Secretary of said corporation; that the same is the free and voluntary act and
deed of said corporation and of himself as such Vice President and Assistant
Secretary, for the uses and purposes therein expressed.

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

UNITED STATES OF AMERICA
Secretary of Commerce
National Oceanic and Atmospheric Administrator

- -----------------------------------------------
Chief, Financial Services Branch
Southeast Region
National Marine Fisheries Service


                                       4



<PAGE>





<PAGE>


Case No. OG-G-864

                          TITLE XI FINANCIAL AGREEMENT

    THIS TITLE XI FINANCIAL AGREEMENT (hereinafter, the "Financial Agreement")
dated October 30, 1996, is made and entered into by Zapata Protein (USA), Inc.,
3840 Highway 22, Mandeville, Louisiana 70471 (hereinafter, the "Borrower"),
Zapata Protein, Inc., 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, (hereinafter, the "Government"),

    WHEREAS, heretofore, the Government, pursuant to the Fisheries Obligation
Guarantee Program, as provided in 46 USC 'SS'1271, et. seq., (hereinafter
"FOG"), made, entered into, and delivered certain agreements and covenants, as
contained in the Commitment to Guarantee Note dated January 28, 1988, as amended
on November 15, 1988, and the Commitment to Guarantee Note executed on November
22, 1988, and further amended by an Approval Letter dated October 11, 1996,
(hereinafter, the "Commitment"), and any other commitment to guarantee note
executed by Zapata Haynie Corporation, Zapata Protein, Inc., or Zapata Protein
(USA), Inc. This Financial Agreement proposes a partial release of the
Commitment and contemplates a loan from Coastal Securities (hereinafter, the
"Bank")(1) to Borrower, in the amount of $1,848,562.00, the repayment of which
is guaranteed by the Government. This transaction will be evidenced by the
issuance of a United States Guaranteed Promissory Note in the amount of
$1,848,562.00 by the Borrower to the Bank (hereinafter, the "Guaranteed Note").
The consideration for the Guaranteed Note is a loan from the Bank to the
Borrower; and the issuance of a Promissory Note to the United States of America
by the Borrower (hereinafter, the "Promissory Note") secured by the property
listed in ARTICLES II and III, below; and

WHEREAS, the consideration for the Promissory Note, Deed of Trust and Security
Agreement, UCC Security Interests, and other related documents executed by
Borrower and the Guarantor is the Government's guarantee contained in the
Guaranteed Note, as may be amended or substituted from time to time, and the
Borrower and the Guarantor understand that the Government is unwilling to enter
into the aforementioned transaction unless this Financial Agreement and related
documents are executed by the Borrower and the Guarantor. For that reason, the
Borrower and the Guarantor have agreed to execute and deliver this Financial
Agreement.

NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of

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




<PAGE>


<PAGE>


which is hereby acknowledged, the Borrower and the Guarantor hereby agree to the
following:

                             ARTICLE I: DEFINITIONS

As used herein, the following terms will be construed to have the meanings set
out below:

    1. All of the terms defined in the preceding paragraphs will have the
definitions set out in said paragraphs.

    2. Collateral includes all of the items set out in ARTICLES II and III of
this Financial Agreement.

    3. Default is defined in ARTICLE IX of this Financial Agreement.

    4. FOG Debt: The outstanding balance of the loan from Bank to Borrower which
is guaranteed by the Government, including original or additional or
supplemental principal and/or interest, and any fees, costs or expenses, of any
nature, which are owed by Borrower to the Government, and, additionally, any
amount owed to a third party which arose from this loan and/or collateral
associated with this loan, and all other indebtedness of the Borrower to the
Government presently existing or which may in any manner or means hereafter be
incurred, including any further loans and advances made to Borrower by the
Government under the provisions hereof.

    5. The Guarantor: Refers to the parent corporation and is defined as set out
in ARTICLE II, Paragraph 3, below.

    6. Affiliate: Includes all wholly owned subsidiaries and stockholders of the
Borrower and the Guarantor of this debt.

    7. Security documents: Includes all documents executed by any individual or
entity in connection with this transaction. This includes, but is not limited
to, the Note, Guaranteed Note, Deed of Trust and Security Agreement, Title XI
Financial Agreement, and Guaranty Agreements.

                             ARTICLE II: COLLATERAL

The Collateral which the Borrower is giving to the Government in order to obtain
its guarantee of Borrower's loan from the Bank includes all of the items listed
below:

    1. THE EQUIPMENT: The Borrower will provide to the Government security
interests, evidenced by UCC filings, in the full amount of the Guaranteed Note,
on all of the property described below (hereinafter, the "Equipment");

                                       2



<PAGE>


<PAGE>


    All fisheries unloading, processing, holding, and distribution equipment of
    whatsoever nature, now or at any time in the future, together with all
    accessories, improvements, replacements, substitutions, or additions
    thereto, used for the Borrower's fisheries operations on the properties
    which secure the Promissory Note and any other debt to the Government, or on
    any other premises at any other site at which the Borrower now conducts, or
    in the future may conduct, its fisheries operations and regardless of the
    Equipment's actual location at any given time. The Equipment shall include,
    but not be limited to: all forklifts, bobcats, cranes, pallet trucks, lift
    trucks, and other product or material movement equipment; all trailers,
    tanks, trucks, or other rolling stock; all fish unloading, transfer, and
    conveying equipment, all fish processing and fish weighing equipment; all
    cooling, refrigerating, freezing, and other fish holding equipment (blast
    freezers, plate freezers, coolers, or other refrigeration equipment); all
    fish packaging equipment; all fish baskets, totes, tanks, tubs, and other
    fish holding equipment; all ice makers; all hand and power tools; and all
    office equipment, all together with all associated equipment, machinery,
    parts, tools, purse boats, or other items of whatsoever nature and whether
    fixed or unfixed to the aforementioned property securing the Promissory
    Note.

    THIS EXCLUDES ONLY SUCH FIRST UCC SECURITY INTERESTS TO THIRD PARTIES as may
be necessary and appropriate to secure credit from such parties for the specific
purpose of purchasing specific equipment (hereinafter "Purchase-Money
Equipment"). In such cases, the Borrower agrees to the following:

          (a) To give to the Government UCC security interests on the
Purchase-Money Equipment second only to the first interests pledged to the
lenders of the purchase-money (hereinafter the "Purchase-Money UCC security
interests"); and

          (b) That the amount secured by the Purchase-Money UCC security
interests shall not exceed the specific purchase cost of said equipment; and

          (c) The term of the credit secured to buy the Purchase-Money Equipment
(and likewise, the duration of the Purchase-Money UCC security interests) shall
not exceed an ordinarily prudent commercial term; and

          (d)  No other Equipment or rights shall be secured by the Purchase-
Money UCC security interests; and

          (e) Upon full repayment of the amounts secured by the Purchase-Money
Equipment, as reflected in the Purchase-Money UCC security interests, these
interests shall be satisfied and the


                                       3


<PAGE>


<PAGE>

Government's second UCC security interest will ascend to first priority.

    THE EQUIPMENT SHALL BE INVENTORIED sufficiently to describe with certainty
in the security agreement and associated UCC filing. The inventory shall be
valued by appraisers acceptable to the Government. The inventory and appraisals
shall be at the Borrower's cost and paid before this loan is closed, unless this
requirement is specifically waived by the Government.

    THE UCC SECURITY AGREEMENT SHALL CONTAIN the following provisions:

          (a) That the Government may enter upon any premises where the
Equipment may be located and marshal, secure, protect, and do all things
necessary to preserve the Equipment immediately upon the Borrower's default, but
before any judicial action regarding such default; and

          (b) Such other provisions as the Government deems necessary to protect
its interest; and

          (c) Zapata Protein (USA), Inc., and Zapata Protein, Inc., agree that
neither corporation will enter into any transaction or agreement with any party
which will result in that party having a secured interest in the Equipment
unless that party first enters into a written agreement, with provisions
acceptable to the Government, that:

                (i) Except for purchase money lien holders, recognize the
Government's senior interest in, and sole rights to, the equipment or proceeds
of the Equipment's liquidation; and

                (ii) Agree not to interfere in any way with, but instead to
cooperate in all reasonable ways with, the Government entering upon any property
owned or leased by the Borrower in order to marshal, secure, protect, and do all
things necessary to preserve the Equipment.

    2. THE REAL PROPERTY includes:

A Deed of Trust in the full amount of the FOG Debt, on such property as more
fully described in Exhibit 1, attached, owned by Borrower, together with all
improvements thereon which comprise the Borrower's fisheries processing facility
in Reedville, Virginia.

    3. THE GUARANTEE: An unconditional guarantee of repayment of the FOG Debt
will be given to the Government by Zapata Protein, Inc., (the "Guarantor").

                       ARTICLE III. ADDITIONAL COLLATERAL



                                       4


<PAGE>


<PAGE>

   1. Individual Transferable Quotas: Should a limited fisheries access system
be initiated at some future date under which the Borrower is granted a
transferable fishery conservation and management allocation (including, but not
limited to, allocations, permits, quotas, licenses, cage tags, or any other
fisheries access restriction or right, however characterized, of whatsoever
nature) affecting, necessary for, or in any other way, however characterized,
associated with any of the property included in the Collateral, the Borrower
agrees to grant to the Government a full senior security interest in such
allocation by whatsoever means deemed by the Government to be appropriate
(including, but not limited to, the Borrower's execution of security agreements
and the filing of financing statements under the UCC). Further, if the Borrower
fails to do so, the Borrower agrees that the Government may use, for the purpose
of executing and otherwise perfecting whatever documents may be required to
effect the grant to the Government of such a full security interest in such
fisheries conservation and management allocation, the attorney-in-fact authority
conferred upon the Government by ARTICLE XI of this agreement.

   2. OTHER COLLATERAL: Any new, different, substitute or other collateral which
may, from time to time, be provided by Borrower or Guarantor to the Government,
will be subject to all of the covenants and provisions of all of the documents
executed in connection with this transaction, including, but not limited to the
Deed of Trust and Security Agreement, this Financial Agreement, the Guaranteed
Note, the Promissory Note, and UCC security interests.

             ARTICLE IV. GOVERNMENT'S PRIOR WRITTEN CONSENT REQUIRED

Without the prior written consent of the Chief, Financial Services Division,
National Marine Fisheries Service, which consent will not unreasonably be
withheld: (1) The Borrower may not take any of the following actions; and (2)
The Guarantor may not take any of the actions listed in Paragraphs 1 through 8,
below.

   1. PAY TO ANY OFFICER, partner, shareholder, or any other person, any salary,
commission, bonus, management fee, dividend or other consideration, however
characterized, in excess of either reasonable industry standards or ordinary
financial prudence for companies of the Borrower's size and financial condition
at the time that such consideration is paid, and Borrower bears the burden of
proving reasonability.

    2. PURCHASE OR REDEEM ANY SHARES OF ITS OWN STOCK.

    3. MAKE ANY ADDITIONAL INVESTMENT (excluding purchases, etc. in connection
with routine/continuing maintenance and


                                       5


<PAGE>


<PAGE>

preservation of the Borrower's property and excluding acquisition of capital
assets representing the reinvestment of involuntary conversion proceeds in
assets similar to those in respect of which the Borrower has received such
involuntary proceeds providing such proceeds are, or are committed to be so
reinvested within 90 days after receipt thereof) in, or incur any additional
liability for, the purchase, acquisition, lease, or other use, however
characterized, of any real property, machinery, equipment, fixtures, 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 five percent of the
Borrower's total assets.

    4. START ANY NEW BUSINESS OR ACQUIRE ANY OTHER BUSINESS, or the assets of
any other business, whether by purchase, merger, consolidation, affiliation, or
any other means, however characterized, whatsoever 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 business.

   5. GUARANTEE OR BECOME CONTINGENTLY LIABLE in any way as surety, endorser,
creditor, co-maker, accommodation maker, or in any other way, however
characterized, for the debt or obligations of any party whatsoever, except as
may be permitted herein or required in the normal course of operations
reasonably necessary to carry on day-to-day business activities.

   6. ALLOW ITSELF TO BE ACQUIRED BY, or otherwise reorganized into, however
characterized, any other Company, unless the acquiring Company or reorganized
entity is reasonably acceptable to the Government and agrees to:

        (a) provide the Government a 100% unconditional guarantee of all debt
actually or contingently owed the Government; and

        (b) be bound by these covenants; and

        (c) be bound by such other covenants as the Government shall reasonably
require to protect its interest; and

        (d) provide the Government such other assurances and security as the
Government may require.

   7. ESTABLISH ANY TRUST, retirement fund or any other fund, however
characterized, for the benefit of itself or any party, or transfer any monies,
property, or other assets of any kind, however characterized, into any such fund
whether now or


                                       6


<PAGE>


<PAGE>

hereafter existing (and any such action shall be void and without effect insofar
as the Government's interests are concerned).(2)

   8. TRANSFER ANY MONIES, property, or other assets, however characterized, to
any party by way of gift or by any other means, however characterized, for any
consideration less than payment by such party of the full and fair market value
thereof (and any such action shall be void and without effect insofar as the
Government's interests are concerned); provided, however, that reasonable
transfers not significantly affecting the Borrower's net worth, and not
inconsistent with the Borrower's or the Guarantor's obligation to protect the
Government from loss by preserving its net worth, shall be exempted.

    9. MAKE ANY DISTRIBUTION OF BORROWER'S ASSETS for compensation (including
salaries, withdrawals, fees, bonuses, commissions, drawing accounts, and other
payments, whether directly or indirectly, in money or otherwise, hereinafter
"compensation") 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
Guarantee. In the event an Affiliate increases the compensation 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, the overpayment returned to the Affiliate,
and immediate notice thereof given to the Government by the Borrower.

                  ARTICLE V. BORROWER'S OBLIGATIONS & COVENANTS

The Borrower shall be bound by and do, perform or discharge all of the following
actions.

    1.  MAINTAIN FINANCIAL RATIOS AS FOLLOWS:

        (a) A current ratio of at least 1.25:1.

        (b) Debt to Equity ratio of not more than 2:1.

    2. NOTICES TO THE GOVERNMENT: Within ten (10) days of its occurrence,
Borrower and the Guarantor must give the Government written notice of any of the
following:

- -------------------
(2) This provision excludes contributions, not exceeding $2,000 per year per
person, to any such party's IRA, Keogh, or 401K account. Any contributions in
excess of $2,000 per year per person to any other retirement account, and any
contributions in any amount to any trust or other fund of whatsoever kind, must
be approved in advance and in writing by us.


                                       7


<PAGE>


<PAGE>

         (a) Any pending litigation, business reverse, casualty, loss, or any
other matter which diminishes:

                 (i) its ability to service any debt actually or contingently
owed the Government; or

                 (ii) its ability to perform any other duty or obligation owed
the Government; or

                 (iii) its ability to fully and faithfully perform any covenant
with the Government; or

                 (iv) the value of any property or other assets pledged to the
Government; or

                 (v) the net worth of any party against whom the Government has
recourse for this debt.

       (b) The institution of any suit, which demands $75,000 or more, against
the Borrower or others deemed by the Government to affect adversely its interest
hereunder, in the Note or otherwise.

              ARTICLE VI. FINANCIAL REPORTING TO AND INSPECTIONS BY
                                 THE GOVERNMENT

    1. BORROWER AGREES TO PROVIDE THE GOVERNMENT AT THE END OF EACH QUARTER of
its tax or accounting years, a certified correct copy of:

         (a) a balance sheet; and

         (b) an income and expense statement for the preceding twelve months;
and

         (c) an aging report of all receivables outstanding; and

         (d) an inventory report for all inventory maintained at the end of each
year.

    2. CERTIFICATION OF FINANCIAL INFORMATION:  Borrower agrees that:

QUARTERLY: At the end of each quarter of Borrower's accounting or tax years,
Borrower's Chief Financial Officer shall certify the correctness of Items VI
1(a) through (d), listed above.

ANNUALLY: At the end of each fiscal year, said items, [VI, 1(a) through 1(b)]
will be audited by independent certified public accountants who are acceptable
to the Government.


                                       8


<PAGE>


<PAGE>


ALL QUARTERLY AND ANNUAL financial reports required hereunder shall include a
certification from the Borrower's Chief Financial Officer that either:

(a) There has been no default, as provided by the security instruments, during
the reporting period; or

(b) There has been a default, as provided by said security instruments, during
the reporting period. In this case the nature, extent, prospective consequences,
and all other relevant details of such default shall be fully set forth in such
certification.

   3. INCOME TAX RETURNS: All tax returns shall be timely filed(3) and a copy of
Borrower's Federal Income Tax Return, along with all supporting schedules, must
be delivered to the Government within 15 days of its filing or issuance.
Borrower agrees to execute a consent and waiver, valid so long as Borrower owes
a debt to the Government, which allows the Internal Revenue Service to release
directly to the Government, Borrower's Federal Income Tax Returns, whenever the
Government requests same.(4)

   4. BORROWER TO DELIVER ALL REQUIRED FINANCIAL STATEMENTS, notices, returns or
reports to the Government's Southeast Regional Financial Services Branch. All
financial statements shall be delivered within 90 days of the close of the
fiscal or accounting year, or such quarter in such year, to which they relate.

    5. METHOD OF BOOKKEEPING: Borrower will, at all times, keep proper books of
account in a manner satisfactory to the Government, including financial and
operating statements including schedules showing all compensation paid by the
Borrower.

   6. GOVERNMENT INSPECTIONS: Permit the Government, or any representative
selected by the Government, in such manner and at such times as the Government
may require, to (a) make inspections and audits of any books, records, papers,
or other documents(5) of whatsoever nature in the custody and control of the
Borrower, Guarantor, or any other entity, relating in any way to the financial
or business condition or prospects of the Borrower, or Guarantor, including the
making of copies thereof and extracts therefrom, and (b) make inspections and
appraisals of any of the Borrower's or Guarantor's physical assets.

- -------------------
(3) Timely filing shall include valid extensions filed with the Internal Revenue
Service.
(4) Borrower agrees to execute IRS Form Nos. 4506 and 8821, thereby implementing
the provisions of 26 USC 'SS'6103(c). Failure to do so constitutes an event of
default.
(5) Including but not limited to off-loading receipts, fish-sale receipts,
business transaction journals, etc.



                                       9


<PAGE>


<PAGE>

    7. BORROWER TO PAY THE COST OF ANNUAL INSPECTIONS: The cost of annual
inspections, audits, or appraisals shall be paid by the Borrower.

    8. GUARANTOR'S OBLIGATIONS: Paragraphs 3, 4, and 6, above, of this ARTICLE
VI, apply to the Guarantor. Additionally, the Guarantor shall provide to the
Government, at the end of each tax year, a certified correct copy of its
Statement of Financial Condition, and if applicable, its SEC-10K Report.

                           ARTICLE VII. GUARANTEE FEES

    1. THE BORROWER AGREES TO PAY TO THE GOVERNMENT the amount required for the
payment of each Guarantee fee at the rate of 1% per year, first, on the date
hereof and, thereafter, on or before the anniversary date of the Guaranteed
Note. In the event the Government at any time determines and gives notice to the
Borrower that the amount of any fee paid under the Guarantee is not correct the
Borrower shall within thirty (30) days after receipt of such notice pay the
Government the amount of any deficiency specified in said notice. In the event
that the fee paid by the Borrower to the Government is in excess of the amount
required by the Guarantee, such excess shall be credited to the account of the
Borrower. In the event that Borrower fails to pay a Guarantee fee, said fee
shall be deemed to be an indebtedness of the Borrower and shall be secured by
the Deed of Trust and Security Agreement 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.

    2. ALL FEES SHALL BE PAID BY THE DELIVERY by the Borrower to the Government
in person or by mail addressed to the Government, by check or money order in the
required amount payable to the order of the Government, together with
identification of the specific Guarantee to which the fee relates and the period
covered by the payment.

    3. THE BORROWER AGREES THAT ALL AMOUNTS PAID BY IT IN ACCORDANCE WITH THIS
SECTION SHALL BE AS FOLLOWS:

          (a) THE FEE REQUIRED FOR THE GUARANTEE shall be computed on the
average principal amount of the Promissory Note outstanding and any amounts
which are due and owing under said Promissory Note during the annual period
covered by said fee.

          (b) FEES SHALL BE SUBJECT TO REDUCTION for erroneous calculations, for
voluntary prepayments made under the Note and other security documents, and for
extraordinary payments made under the Note and other security documents, such as
proceeds of insurance upon total loss applied in reduction of principal and
additional payments contingent on earnings. Fees shall be subject to increase
for erroneous calculations and for payments


                                       10


<PAGE>


<PAGE>

required under the Note and other security documents, which are delinquent.

          (c) THE PAYMENT OF THE INITIAL FEE is being made to the Government
concurrently with the execution and delivery of the Guaranteed Note, the receipt
whereof by the Government is hereby acknowledged, and covers a twelve-month
period commencing with the date hereof.

          (d) EACH FEE SHALL BE DEEMED TO BE FULLY EARNED as of the commencement
of the period to which it is applicable. No refund will be made by the
Government of the initial fee paid or of any subsequent annual fee, or deficient
fee applied in payment in accordance with this SECTION in the event the
Guarantee shall terminate, except as provided in this SECTION.

          (e) IN THE EVENT THE GUARANTEE SHALL TERMINATE, the obligation to pay
further fees hereunder (other than deficient fees) shall cease as of the time of
such termination. If payment under the Guarantee shall have been properly
demanded and shall not have been made, for any reason (other than under the
conditions under which the Government is not required to make payment under the
Guarantee) within the thirty-day period from proper demand the obligation to pay
further premium charges hereunder (other than deficient premium charges) shall
cease as of the last time the Government shall have been obligated to make
payment under the Guarantee.

          (f) IF AT THE TIME OF TERMINATION of the Guarantee the Government
holds any excess fee or any annual fee which has not been applied in payment in
accordance with this SECTION (or the time for application of which has not
arrived), such excess fee shall be (i) refunded to the Borrower if the Guarantee
shall terminate pursuant to payment in full of the Note and (ii) retained by the
Government as collateral security for the payment of the Note and any amounts
due under the security documents, and any sum due to the Government if the
Guarantee shall terminate pursuant to payment of the Guarantee by the Government
or if there is a failure of the holder of the Guaranteed Note to properly demand
payment of the Guarantee from the Government within 60 days of notification of a
default under the Guaranteed Note by the Government and the Guarantee is
terminated. If payment of the Guarantee shall have been demanded and shall not
have been made, for any reason (other than under the conditions under which the
Government is not required to make payment of the Guarantee) within the
thirty-day period therefor, any excess fee or any annual fee which has not been
applied in payment in accordance with this SECTION (or the time for application
of which has not arrived), as of the time the Government shall have been
obligated to make payment under the Guarantee, shall be retained by the
Government as indemnity.



                                       11


<PAGE>


<PAGE>

                      ARTICLE VIII. LOUISIANA LAW TO GOVERN

   To the extent not governed by the laws of the United States, all provisions
of this Financial Agreement shall be construed, given effect, and enforced
according to the laws of the State of Louisiana. With respect to any claim or
proceeding relating to this Financial Agreement, the Borrower and Guarantor
hereby consent to and subject themselves to the jurisdiction of the state and
federal courts located in the State of Louisiana, and agree that the venue of
any action or proceeding relating to this Financial Agreement shall lie
exclusively in said state. The parties hereto acknowledge and agree, however,
that in the event that an action to foreclose a real property mortgage and
security agreement or deed of trust and security agreement is brought, it will
be brought pursuant to the laws of the state where the real property is located
and the parties hereto hereby consent to and subject themselves to the
jurisdiction of the courts of said state.

                               ARTICLE IX: DEFAULT

    1. THE OCCURRENCE OF ANY OF THE FOLLOWING CONSTITUTES AN EVENT OF DEFAULT:

         (a) ANY FAILURE TO OBSERVE, PERFORM, COMPLY WITH AND DISCHARGE ALL OF
THE COVENANTS, CONDITIONS, AND OBLIGATIONS WHICH ARE IMPOSED ON:

                 (i) BORROWER by this Title XI Financial Agreement, the
                 Promissory Note, dated October 30, 1996, the Deed of Trust and
                 Security Agreement, dated, October 30, 1996, and any other
                 agreement or document executed in connection with this
                 Financial Agreement and the Note, concurrently or otherwise,
                 inclusive of amendments thereto, in connection with this
                 Financial Agreement, or subsequent amendment or agreement,
                 regardless of whether or not the Borrower shall be a party to
                 said agreement or document, and such default shall continue for
                 fifteen (15) days; or

                  (ii) ANY GUARANTOR by any Guaranty Agreement, whether or not
                  the Borrower is party to said agreement, and such default
                  shall continue for fifteen (15) days; or

          (b)  ANY FAILURE TO PAY OR MAKE PAYMENTS ON:

                 (i) INTEREST ON THE NOTE OR THE GUARANTEED NOTE when and as the
                 same shall become due and payable as therein provided, and such
                 default shall continue for fifteen (15) days; or



                                       12


<PAGE>


<PAGE>

                 (ii) PRINCIPAL OF THE NOTE OR THE GUARANTEED NOTE when and as
                 the same shall become due and payable, whether at maturity, by
                 notice of acceleration, or otherwise, and such default shall
                 continue for fifteen (15) days; or

                 (iii) GUARANTEE FEES as required by ARTICLE VII of this
                 document, and such default shall continue after ten (10) days
                 written notice; or

          (c)  FINANCIAL EVENTS:

                 (i) Borrower makes a general assignment for the benefit of the
                 Borrower's creditors; or

                 (ii) Borrower loses the right to do business, by forfeiture or
                 otherwise; or

                 (iii) A receiver or receivers of any kind whatsoever, whether
                 appointed or not, in admiralty, bankruptcy law, common law, or
                 equity proceedings, and whether temporary or permanent, shall
                 be appointed for all property of the Borrower; or

                 (iv) PETITION OR OTHER PROCEEDING OR ACTION IN BANKRUPTCY,
                 regarding the Borrower, is filed by the Borrower or by
                 creditors of the Borrower; or

          (d) FAILURE TO MAINTAIN ANY OF THE INSURANCE COVERAGE as outlined in
Paragraph 4: Insurance Requirements, found on pages 14 and 15 of the Approval
Letter.

          (e) A MATERIAL MISREPRESENTATION OR UNDISCLOSED FACT, made or omitted
in any application, agreement, affidavit, or other document, submitted in
connection with the Guarantee, on behalf of, or for the benefit of, or by the
Borrower; or

          (f) INSTITUTION OF ANY SUIT AGAINST THE BORROWER or others deemed by
the Government to affect adversely its interest hereunder, in the Note or
otherwise;

          (g) IMPAIRMENT OF ANY COLLATERAL.

    2. GOVERNMENT ACTIONS UPON OCCURRENCE OF AN EVENT OF DEFAULT, whether or not
the Guaranteed Note has been paid to the Bank by the Government, the Government
may, in the Government's discretion, so long as such event of default shall be
continuing, do any or all of the following:

        (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


                                       13


<PAGE>


<PAGE>

thereafter shall bear interest at eighteen percent (18%) per year unless such
would violate the usury laws of the state where the Note and the Guaranteed Note
are executed, in which case the maximum legal rate of that state shall prevail;
and/or

        (b) BRING SUIT IN COURT OF COMPETENT JURISDICTION, at discretion of the
Government, to obtain judgment for any and all amounts due under the Note, or
otherwise hereunder, and collect the same out of any and all property of the
Borrower; and/or

        (c) FORECLOSE THE DEED OF TRUST AND SECURITY AGREEMENT AND SELL any real
and/or personal property which secures the FOG Debt; and/or

        (d) RETAKE AND/OR SELL THE EQUIPMENT WITHOUT LEGAL PROCESS as provided
by the Deed of Trust and Security Agreement, or any other document which has
been executed by or on behalf of the Borrower; and/or

        (e) OVERDUE GUARANTEE FEES shall, beginning with the first day such
guarantee fees are due but unpaid, be added to the principal of the Promissory
Note, earn interest at the same rate as specified in the Promissory Note for
overdue principal, and be secured by all of the collateral and security
documents. This provision will not be deemed a waiver of any of the Government's
rights or other remedies, as set out above, and elsewhere, and such overdue
guarantee fees shall remain due and payable as originally scheduled.

          ARTICLE X. TITLE XI FINANCIAL AGREEMENT GOVERNS; SEVERABILITY

    To the extent that any of the terms and conditions of this Financial
Agreement are inconsistent or in contradiction with the terms and conditions of
any other agreement between the Government and the Borrower, including but not
limited to previously executed Title XI financial agreements, then the terms of
this Financial Agreement shall govern, otherwise, all such terms and conditions
of such other agreements will continue with full force and effect.

    The unenforceability or invalidity of any provision(s) of this Title XI
Financial Agreement shall not render any other provision(s) herein unenforceable
or invalid.

                          ARTICLE XI. POWER OF ATTORNEY

    Borrower hereby irrevocably appoints the Government the true and lawful
attorney of the Borrower, in its name and stead to execute any other document
necessary to perfect or protect the Government's security interests regarding
this transaction and/or all aspects of the FOG Debt.



                                       14


<PAGE>


<PAGE>

                ARTICLE XII: ENVIRONMENTAL HAZARD INDEMNIFICATION

        Borrower and Guarantor hereby agree to the following with respect to
environmental hazards or contamination associated with the Collateral:

        A. That, at closing, Borrower and Guarantor will execute a Certification
and Indemnification Agreement Regarding Environmental Matters which provides
that they shall, jointly and severally, be liable for any and all contamination,
cleanup, and environmental actions against the Collateral. That they are,
jointly and severally, liable for all costs and claims associated with or
resulting from any claim, cleanup, or lien imposed against any of the
Collateral.

        B. That Borrower and Guarantor will hold the Government harmless from
any claim or duty arising from environmental defects or hazards associated with
the Collateral.

        C. At closing, Borrower must certify in writing that, to the best of its
knowledge, there are currently no defects or environmental hazards on or about
the Collateral.

        In the event this loan is not closed because of the discovery of such
defects or environmental hazards previously unknown to Borrower, the Government
will refund the commitment fee less all costs incurred by the Government in
attempting to close.

    IN WITNESS WHEREOF, the Borrower has executed this Title XI Financial
Agreement the day and year first above written.

                                GOVERNMENT:

                                UNITED STATES OF AMERICA
                                Secretary of Commerce
                                National Oceanic and Atmospheric Administration

                                ________________________________________________
                                Chief, Financial Services Branch
                                Southeast Region
                                National Marine Fisheries Service

Attest:                              BORROWER:  Zapata Protein (USA), Inc.

By:_______________________________         By:__________________________________

Title: Assistant Secretary                 Title: Vice President and
                                                  Controller



                                       15


<PAGE>


<PAGE>

Date: October 30, 1996                      Date: October 30, 1996
 (SEAL)

Attest:                                     GUARANTOR:  Zapata Protein, Inc.

By:_______________________________          By:_________________________________

Title: Assistant Secretary                  Title: Vice President and
                                                   Assistant Secretary

Date: October 30, 1996                      Date: October 30, 1996

(SEAL)

                                       16



<PAGE>





<PAGE>



                1996 CERTIFICATION AND INDEMNIFICATION AGREEMENT
                         REGARDING ENVIRONMENTAL MATTERS

THIS INDEMNITY AGREEMENT is entered into this 30th day of October, 1996, between
Zapata Protein (USA), Inc., 3840 Highway 22, Mandeville, Louisiana 70471,
(hereinafter called the "Borrower"), Zapata Protein, Inc., 1717 St. James Place,
Suite 550, Houston, Texas 77056, (hereinafter called 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 called the
"Government"); and

RECITALS:

1.   The Borrower is the owner of certain real property, (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 guaranteed certain obligations of the Borrower (the
     "Guarantees") in consideration for which the Borrower has executed and
     delivered to the Government certain promissory notes to the United States
     of America, as amended, payable to the Government (the "Notes"), which
     Notes are secured by, among other things, certain mortgages and/or deeds of
     trust, as amended, and certain mortgages and security agreements and/or
     deeds of trust and security agreements, respecting the Premises (the
     "Mortgage"). These mortgages and/or deeds of trust are more particularly
     described in Exhibits B and C, attached hereto and incorporated herein by
     this reference.

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




<PAGE>


<PAGE>


DEFINITIONS:

The following definitions shall apply for purposes of this Agreement:

1.   "PREMISES" shall mean all real property, along with all improvements
     thereon, now or hereafter owned, leased or possessed by the Borrower and
     which is now or hereafter subject to a mortgage in favor of the Government.

2.   "LOAN DOCUMENTS" shall mean this agreement and any other loan documents,
     instruments or agreements now or hereafter existing between the Borrower,
     and/or the Guarantor and the Government, including, but not limited to,
     Mortgages, Deeds of Trust, Mortgage and Security Agreement, Deed of Trust
     and Security Agreement, Financial Agreement and Approval Letter.

3.   "THIS TRANSACTION" shall mean all transactions between the Government and
     Zapata Haynie, Inc., and/or its successors, Zapata Protein, Inc., Zapata
     Protein (USA), Inc., and/or any other successors.

4.   "CONTAMINATION" shall mean the presence of any Hazardous Materials on,
     about or beneath the Premises or arising from the Premises which may
     require clean-up, or other costs, or which may be in violation of any of
     the Environmental Laws.

5.   "ENVIRONMENTAL LAWS" shall mean any and all Federal, state, local or
     municipal laws, rules, orders, regulations, statutes, ordinances, codes,
     decrees or requirements of any Governmental Authority regulating, relating
     to or imposing liability or standards of conduct concerning environmental
     protection matters, including without limitation, Hazardous Materials, as
     now or may at any time hereafter be in effect.

6.   "GOVERNMENTAL AUTHORITIES" shall mean any nation or government, any state
     or other political subdivision thereof and any entity exercising executive,
     legislative, judicial, regulatory or administrative functions of or
     pertaining to government, but only to the extent that any such Governmental
     Authority shall exercise jurisdiction over the Borrower and the Guarantor
     or the Government, as the case may be.

7.   "HAZARDOUS MATERIALS" shall mean any hazardous materials, hazardous wastes,
     hazardous constituents, hazardous or toxic substances, petroleum products
     (including crude oil or any fraction), defined or regulated as such in or
     under any Environmental law; or any substance or conditions that may
     require clean-up or other costs.


                                       2




<PAGE>


<PAGE>


IN CONSIDERATION OF the issuance of certain Guarantees pursuant to Title XI of
the Merchant Marine Act, 1936, as amended, found at 46 USC 'SS'1271-80 and Part
253 of Title 50 of the Code of Federal Regulations, as amended on May 1, 1996,
found at 50 CFR 253, known as the Fisheries Obligation Guarantee Program,
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:

I.   Except as shown in the report, dated January 15, 1996, of the Phase 1
Environmental Assessment performed by ENPRO on the Reedville, Virginia facility:

     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,


                                       3




<PAGE>


<PAGE>


     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.

II.  Notwithstanding any matter shown in ENPRO's January 15, 1996, Phase 1
Environmental Assessment Report:

     1. 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 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.

     2. 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 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.


                                       4




<PAGE>


<PAGE>


The Borrower and Guarantor acknowledge that they have read and understand the
Phase 1 Environmental Assessment Report dated January 15, 1996, and hereby
assume responsibility and liability for all matters shown therein and further
agree that the absolute indemnification of the Borrower and the Guarantor,
covers all matters contained in said report and the Government shall be held
harmless by the Borrower and the Guarantor from any liability arising from any
matter contained in said report.

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;

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;


                                       5




<PAGE>


<PAGE>


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


                                       6




<PAGE>


<PAGE>


     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.

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;


                                       7




<PAGE>


<PAGE>


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;

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:

          Zapata Protein (USA), Inc.
          3840 Highway 22
          Mandeville, LA 70471

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


                                       8




<PAGE>


<PAGE>


3.   GOVERNING LAW: This Agreement has been delivered to the Government of State
     or other appropriate filing authority in all states where the Premises are
     located, and 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.

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
     Hazardous Materials executed by some of the parties on March 31, 1993.
     Where a provision in this


                                       9




<PAGE>


<PAGE>


     agreement conflicts with a provision of said 1993 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 30th day of October, 1996.



Attest:                                   BORROWER:  Zapata Protein (USA), Inc.


By:                                       By:
   --------------------------------          ----------------------------------
Title: Assistant Secretary                Title: Vice President and
                                          Controller


Date: October 30, 1996                    Date: October 30, 1996


(Seal)




Attest:                                   GUARANTOR:  Zapata Protein, Inc.


By:                                       By:
   --------------------------------          ----------------------------------
Title: Assistant Secretary                Title: Vice President and
                                          Assistant Secretary

Date: October 30, 1996                    Date: October 30, 1996


(Seal)


                                       10






<PAGE>





<PAGE>


                                  DEED OF TRUST

                          DATED AS OF OCTOBER 30, 1996

                                     MADE BY

                           ZAPATA PROTEIN (USA), INC.

                                       TO

                               JAMES C. BREEDEN OF
                           LANCASTER COUNTY, VIRGINIA

                                       AND

                             B.H.B. HUBBARD, 111, OF
                           LANCASTER COUNTY, VIRGINIA

                               FOR THE BENEFIT OF
                           THE UNITED STATES OF AMERICA




<PAGE>


<PAGE>


                             DEED OF TRUST AND SECURITY AGREEMENT

COMMONWEALTH OF VIRGINIA
COUNTY OF NORTHUMBERLAND

    1. PARTIES: WHEREAS, ZAPATA PROTEIN (USA), INC., a Virginia corporation,
hereinafter "Grantor", whether one or more, is indebted to the UNITED STATES OF
AMERICA acting by and through the Secretary of Commerce, Office of the Financial
Services Division, National Marine Fisheries Service, National Oceanic and
Atmospheric Administration, hereinafter "Beneficiary", in the principal sum of
One Million, Eight Hundred Forty-eight Thousand, Five Hundred Sixty-two and
No/100 Dollars ($1,848.562.00), together with interest thereon, as evidenced by
a promissory note, payable to the order of the United States of America acting
by and through the Secretary of Commerce, Office of the Financial Services
Division, National Marine Fisheries Service, National Oceanic and Atmospheric
Administration which bears interest and is payable according to the terms of
said note and which has a final maturity date of October 30, 2011.

    2. THE PROMISSORY NOTE TO THE UNITED STATES OF AMERICA: NOW, THEREFORE, in
consideration of the premises and in order to secure the prompt and full payment
of said indebtedness, and any future advance(s), additional advance(s), and/or
readvance(s), and/or any renewal(s), extension(s), restructuring(s),
reamortization(s), and/or any other loan treatment(s) thereof, or any part
thereof, and the interest thereon and any and all other indebtedness(es)
(including future advance(s) now or hereafter owed by any of the undersigned to
the Beneficiary), whether such indebtedness(es) is primary or secondary, direct
or indirect, contingent or absolute, matured or unmatured, joint or several, and
otherwise secured or not, and to secure the faithful performance of and
compliance with all the terms, agreements, provisions, obligations, covenants,
conditions, warrants, representations, and stipulations herein made, or made in
any Loan Agreement or in any other document related to the promissory note
described as follows:

    The Promissory Note to the United States of America executed by Grantor
    in the principal amount of One Million, Eight Hundred Forty-eight
    Thousand, Five Hundred Sixty-two & No/100 Dollars, ($1,848.562.00),
    with interest on the un