Exhibit 10.1
FIRST AMENDED AND RESTATED
MEMBERSHIP AGREEMENT
This FIRST AMENDED AND RESTATED
MEMBERSHIP AGREEMENT is entered into as of September
, 2005, by and among ALASKA OCEAN
SEAFOOD LIMITED PARTNERSHIP, a Washington limited partnership,
TRIDENT SEAFOODS CORPORATION, a Washington corporation, AMERICAN
SEAFOODS COMPANY LLC, a Delaware limited liability company
(“American”), ARCTIC FJORD, INC., a Washington
corporation, ARCTIC STORM, INC., a Washington corporation, GLACIER
FISH COMPANY LLC, a Washington limited liability company, HIGHLAND
LIGHT SEAFOODS, L.L.C., a Washington limited liability company,
STARBOUND LLC, a Washington limited liability company, and any
other members admitted pursuant to this Agreement (together, the
“Members”) and POLLOCK CONSERVATION COOPERATIVE, a
Washington nonprofit corporation (the
“Cooperative”).
RECITALS
A. The American Fisheries Act (Div.
C, Title II of Public Law 105-277) (the “Act”)
allocates the annual quota for the Bering Sea pollock fishery among
three harvesting sectors and defines the classes of vessels
eligible to harvest within each sector. Under Sections 206(b)
and 208(e) of the Act, 40% of the Bering Sea pollock resource (net
of a 10% allocation to the Community Development Quota program, and
net of certain amounts reserved for incidental catch in non-pollock
fisheries) is allocated to the catcher/processor sector (the
“Catcher/Processor Allocation”), and the class of
catcher/processor vessels eligible to harvest the Catcher/Processor
Allocation is limited to certain named vessels and such replacement
vessels as may be permitted by the Act (the “Vessels”)
and any catcher/processor qualifying under Section 208(e)(21)
of the Act. (The Vessels are identified on Exhibit B to
this Agreement.) Pursuant to Section 210(c) of the Act, not
less than 8.5% of the Catcher/Processor Allocation is to be made
available to be harvested by certain catcher vessels (the
“Catcher Vessels”).
B. American is the bareboat
charterer and manager of Vessels 1 through 7 on
Exhibit B . The other Members own Vessels 8 through
19.
C. The Bering Sea pollock fishery
has traditionally been managed on an “open access” or
“Olympic competition” basis. Under this management
regime, each fishery participant has an incentive to harvest as
much resource as possible as quickly as possible, because when the
common pool of the relevant sector’s pollock quota is
consumed, that sector is required to cease fishing.
D. Because it promotes a “race
for the fish”, open access management encourages wasteful
fishing and processing practices (as participants have an incentive
to maximize harvest rather than optimize utilization of their
catch), and creates a strong disincentive to employ careful fishing
practices that have been demonstrated to reduce incidental catch of
non-target species and increase product recovery rates.
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E. The Members believe that by
reaching agreement concerning the amount of the Catcher/Processor
Allocation each of them will harvest, it will be feasible for them
to reduce the pace of their harvesting activities, increase the
amount of product produced per ton of fish harvested, and modify
their fishing operations to reduce their incidental catch of
non-target species.
F. To promote their compliance with
the Magnuson-Stevens Fishery Conservation and Management Act
standards promoting reduction of waste, discards and incidental
catch of non-target species in the fisheries of the United States,
and to reduce the incidental catch of non-target species in the
Bering Sea fisheries, the Members desire to enter into an agreement
regarding certain fish harvesting activities.
Now, therefore, the parties agree as
follows:
1.
Harvesting Plan . Each Member hereby agrees, subject to the
terms and conditions of the Act, this Membership Agreement, the
Articles of Incorporation and the Bylaws of the Cooperative, and
applicable restrictions under U.S. antitrust law, to harvest an
annual percentage of the Bering Sea and Aleutian Islands resources
no greater than provided under this Agreement.
a.
Pollock . Each Member agrees to harvest an annual percentage
of the Bering Sea/Aleutian Islands directed pollock fishing
allowance no greater than that Member’s percentage as set
forth on the harvest schedule attached hereto as Exhibit A ,
(the “Harvest Schedule”).
b.
Non-Pollock Groundfish . Each member agrees to harvest an
annual percentage of Bering Sea/Aleutian Islands non-pollock
groundfish no greater than the percentages determined in accordance
with Subsections 1.b.(i) and 1.b.(ii), below
(i)
Directed Catch . Section 211(b) of the Act prohibits
the Vessels from, in the aggregate, exceeding the percentage of the
Harvest available to the offshore component of any non-pollock
Bering Sea and Aleutian Islands groundfish fishery, that is
equivalent to the total harvest by the Vessels and certain named
ineligible vessels (listed in Section 209 of the Act)
(collectively, the “Contributing Vessels”) in such
fishery in 1995, 1996 and 1997 (the “Base Years”),
relative to the total amount available to have been harvested by
the offshore component in such fishery in the Base Years. To
facilitate compliance with the limit described in this Section, all
Members shall annually allocate among themselves the amount of
non-pollock groundfish allocations available for directed harvest
by the Vessels in direct proportion to the catch history of the
Contributing Vessels in the Base Years, or during such other
year(s) as all Members may agree. The provisions of Section 3
shall apply to any Member’s failure to comply with such
allocation.
(ii)
Incidental Catch . All amounts of non-pollock groundfish
reserved by NMFS for bycatch purposes shall be made available to
the
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Vessels as a group. Each Member agrees to
prevent its Vessels from harvesting at bycatch rates substantially
in excess of their historical levels.
c.
Management Measures . Each Member’s allocation of
pollock and other groundfish species shall be subject to all
management measures generally applicable to the Catcher/Processor
Allocation and the other groundfish allocated under
Section 1.b., above (including but not limited to seasonal
apportionments and area harvest restrictions) on a discreet,
individual basis; i.e., each Member shall be restricted to
harvesting no greater percentage of such Member’s allocation
in any season or area than the aggregate percentage of the
Catcher/Processor Allocation permitted to be harvested in such
season or area. Each Member shall have the individual authority to
carry over from season to season a percentage of that
Member’s seasonal apportionment for each species no greater
than the carry-over percentage generally applicable to the
Catcher/Processor Allocation.
d.
Prohibited Species Catch Allocations . Prohibited species
catch (“PSC”) apportionments for the fisheries in which
the Members participate shall be made in a manner that will allow
each Member, to the maximum extent possible, to prosecute pollock
and non-pollock groundfish fisheries at a level equal to the
Member’s average harvest level during the Base Years.
Initially, PSC will be apportioned among the pollock and
non-pollock fisheries in the same proportion, on a PSC to target
species ratio, as PSC limits established by the Council and NMFS
for the Base Years. Any change in these initial apportionments will
require the approval of all Members.
e. Annual
Fishing Plan . The Members agree to meet each January prior to
the opening of the trawl fishery to prepare an annual fishing plan
that allocates the incidental catch referenced in
Section 1.b.(ii), above and the PSC allocations referenced in
Section 1.d., above among the directed fisheries in which the
Members are eligible to participate. The Members agree to meet
regularly to review the annual fishing plan and make appropriate
adjustments.
f. Scope
of Agreement . The Members agree that the Harvest Schedule and
the provisions of Subsection 1.b., above govern only the
harvesting activities of the Members, and, pursuant to
Section 10, below, nothing in this Agreement shall be
construed as limiting any Member’s production from the fish
it harvests (which each Member is encouraged to maximize, within
the terms of this Agreement), or limiting in any respect each
Member’s ability to market such products on a fully
competitive basis.
g. Vessel
Use . Members with more than one Vessel eligible to harvest
under the Catcher/Processor Allocation may elect to harvest their
Harvest Schedule and non-pollock groundfish percentages with any
number of Vessels.
h.
Acquisition or Transfer of Harvesting Allocation . Not
withstanding the provisions of Section 1.a and 1.c. above, and
subject to limits imposed
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by law, each Member shall have the right to
transfer some or all of such Member’s pollock and other
groundfish allocation(s) to one or more other Members, and shall
have the right to acquire pollock and other groundfish and/or the
rights to harvest pollock and groundfish from the Catcher Vessels,
or any of them, or an association they may form, on any terms each
Member may agree upon. Members doing so shall notify the
Cooperative and Sea State, Inc. or such other independent quota
monitoring service as the Cooperative may retain from time to time
(the “Monitoring Service”) within seven (7) days,
and in any case, prior to the harvest of any portion of a
transferred allocation. Upon providing such notice, the relevant
Members’ Harvest Schedules and/or non-pollock allocation
percentages shall be considered to be amended accordingly for the
term of the transfer agreement.
2. Catch
Monitoring . To enable each Member and the Cooperative to
monitor other Members’ compliance with the Act and this
Agreement, each Member hereby agrees to carry the number and type
of NMFS-certified observers required by law aboard each of its
Vessels participating in the Bering Sea/Aleutian Islands fisheries
during the term of this Agreement, and to report each
Vessel’s catch on a daily basis to both the NMFS Observer
Program and the Monitoring Service. Each Member agrees that absent
manifest error, the catch data produced for the Cooperative by the
Monitoring Service shall be presumed accurate, and that each
Member’s obligations under this Agreement and all related
documents may be enforced to their fullest extent on the basis of
such data.
3.
Allocation Enforcement . Each Member acknowledges and agrees
that the benefits associated with the Members’ mutual harvest
agreement will only accrue to the Members if each of them strictly
complies with the Harvest Schedule and the non-pollock groundfish
allocations determined in accordance with Section 1.b., above.
Each Member acknowledges that all other Members will take certain
significant operational and financial actions based on this
Agreement, and that a breach of this Agreement by any Member would
have significant adverse consequences. Therefore, to facilitate
enforcement of this Agreement, each Member agrees to the procedure
set forth in this Section 3.
a.
Forfeiture Amount Calculation . Not less than thirty
(30) days before each first annual Bering Sea trawl fishery
opening for the catcher/processor sector, the Cooperative Board of
Directors shall set a forfeiture amount for an unprocessed metric
ton of each species covered by this Agreement (the
“Forfeiture Amounts”).
b.
Bonding or Alternative Security . Not more than ten
(10) days following announcement of the Forfeiture Amounts by
the Board of Directors, each Member shall provide the Cooperative
with such security as the
