Exhibit 4.18
LIMITED PARTNERSHIP AGREEMENT
of
SEA BREEZE PACIFIC JUAN DE FUCA CABLE,
LP
This Limited
Partnership Agreement of Sea Breeze Pacific Juan de Fuca Cable, LP,
a Delaware limited partnership (the “ Partnership
”) is entered into as of the 24 th day of March, 2005 (this “
Agreement ”) by and between Juan de Fuca Cable
Management, Inc., a Delaware corporation (the “ General
Partner ”), with an address at 203 Red Stone Hill,
Plainville, CT 06062, SBJF Holding Corp., a British Columbia
corporation (“ Sea Breeze ”) and Boundless
Energy NW, Inc., a Delaware corporation (“ Boundless
Energy ”, and together with Sea Breeze, the “
Limited Partners ”, and the Limited Partners, together
with the General Partner shall collectively be referred to as the
“ Partners ”).
WHEREAS, the
Limited Partners are affiliates of Sea Breeze Pacific Regional
Transmission System, Inc., a Delaware corporation (“
Assignor ”);
WHEREAS, the
Partnership is entering into that certain Asset Assignment
Agreement dated as March 31, 2005 with Assignor and is the
beneficiary of that certain Bill of Sale dated as of March 31, 2005
by Assignor, pursuant to which the Assignor is transferring, or
agreeing to transfer upon receipt of necessary consents, or
agreeing to cause its affiliates to transfer, all right, title and
interest in and to all of the assets used or held for use in
connection with the Project and located in Canada, issued by
Canadian governmental authorities or otherwise primarily connected
to Canada (the “ Canada Assets ”), in exchange
for the Partnership issuing Partnership Interests (as defined
herein) to the Limited Partners; and
WHEREAS, the
Partners desire to enter into this Limited Partnership Agreement
for the purposes set forth herein, to admit the Limited Partners as
limited partners of the Partnership and appoint the General Partner
as the general partner of the Partnership, and to set forth the
rights, duties and obligations of the Partners.
ARTICLE I
General Provisions
Section 1.01
Formation . The parties hereto hereby form the Partnership
as a limited partnership pursuant to the provisions of the Delaware
Revised Uniform Limited Partnership Act (as in effect on the date
hereof and as amended from time to time, the “ Delaware
Act ”).
Section 1.02
Partnership Name . The name of the Partnership is and shall
be Sea Breeze Pacific Juan de Fuca Cable, LP.
Section 1.03
Purpose . The purpose of the Partnership shall be to develop
a 550 MW High Voltage Direct Current submarine transmission link
spanning the Strait of Juan de Fuca connecting the city of Victoria
on the southern tip of Vancouver Island, British Columbia, Canada
to Port Angeles, Washington State, U.S.A., or some alternative
route connecting Greater Victoria on Vancouver Island to the
Olympic Peninsula (the “ Project ”) and to
engage in any
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other legal business or activity
as determined from time to time by the General Partner. The
Partnership may engage in any and all activities and transactions,
including the expenditure or borrowing of funds, as General Partner
may deem to be necessary, advisable, appropriate or incidental to
carrying out the purpose of the Partnership.
Section 1.04
Place of Business . The Partnership shall have offices
located at 203 Red Stone Hill, Plainville, CT 06062, or elsewhere
as the General Partner may from time to time determine. The
Partnership may have more than one (1) office as the General
Partner may from time to time determine.
Section 1.05
Fiscal Year and Fiscal Quarter . The fiscal year of the
Partnership shall end on December 31 of each year (the “
Fiscal Year ”). The Fiscal Year may be changed by the
General Partner. In the event that the General Partner changes the
Partnership’s Fiscal Year, the dates and time periods
referred to in this Agreement shall be appropriately adjusted. The
term “ Fiscal Quarter ” shall mean the three
(3) month period beginning on January 1, April 1,
July 1 and October 1 of each calendar year and such other periods
as may be designated from time to time as a Fiscal Quarter by the
General Partner.
Section 1.06
Term of Partnership . The term of the Partnership commenced
upon filing of the Partnership’s Certificate of Limited
Partnership (the “ Certificate ”) with the
Delaware Secretary of State and shall be perpetual, unless earlier
terminated as provided in Section 13.01 below.
ARTICLE II
Composition; Admissions
Section 2.01
Names of the Partners . Juan de Fuca Cable Management, Inc.,
a Delaware corporation, shall be the sole General Partner of the
Partnership. SBJF Holding Corp., a British Columbia corporation and
Boundless Energy NW, Inc., a Delaware corporation, shall be the
sole Limited Partners of the Partnership. The names and addresses
of the General Partner and of each of the Limited Partners are set
forth on Schedule 1 attached hereto, which schedule
shall be updated from time to time as new partners are admitted and
kept on file at all times at the principal place of business of the
Partnership.
Section 2.02
Admission of Partners . Additional Limited Partners may be
admitted to the Partnership after the date hereof only as provided
in Article VIII below. In connection with the admission of a
Limited Partner to the Partnership, such Limited Partner shall, in
advance of such admission and as a condition thereto, sign a copy
of this Agreement or an agreement to become bound by the provisions
of this Agreement. A substitute General Partner, and affiliated or
additional general partners, may be admitted to the Partnership
only as provided in Article IV below.
Section 2.03
Partnership Interests . For purposes of this Agreement, the
term “ Partnership Interest ” shall mean the
quotient resulting from dividing the amount in a Partner’s
Capital Account (as defined in Section 9.01 below) by the
aggregate amount in the Capital Accounts of all Partners. The
Partnership Interests of the Partners are set forth on Schedule
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attached hereto, which the
General Partner shall update from time to time to reflect changes
in the Capital Accounts of the Partners.
Section 2.04
Certificates .
(a) Every
Partner shall be entitled to have a certificate of certificates
evidencing the Partnership Interest owned by such Partner.
Certificates evidencing the Partnership Interests be in such form
as shall approved by the General Partner. Certificates shall be
consecutively numbered and shall state the following upon the face
thereof: (i) that the Partnership is a limited partnership
formed under the Delaware Act, (ii) that the certificates
evidence Partnership Interests and (iii) the name of the
record holder in whose name the Partnership Interests are
registered.
(b) Certificates
evidencing Partnership Interests shall be signed on behalf of the
Partnership by the General Partner. The signatures of the General
Partner upon a certificate may be facsimiles.
(c) All
certificates evidencing Partnership Interests shall have affixed
thereto a legend substantially in the following form:
THE
INTERESTS EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE STATE
SECURITIES LAWS AND ACCORDINGLY SUCH INTERESTS MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
SUCH ACT AND SUCH LAWS OR UNLESS PURSUANT TO AN EXEMPTION
THEREFROM. TRANSFERS, SALES, PLEDGES, HYPOTHECATIONS AND OTHER
DISPOSITIONS OF THE INTERESTS EVIDENCED BY THIS CERTIFICATE ARE
FURTHER RESTRICTED BY THE TERMS OF THE LIMITED PARTNERSHIP
AGREEMENT OF SEA BREEZE PACIFIC JUAN DE FUCA CABLE, LP.
(d) The
Partnership may issue a certificate in place of a certificate
evidencing Partnership Interests alleged to have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the
Person claiming the certificate to be lost, stolen or destroyed.
When authorizing the issuance of a new certificate or certificates,
the Partnership may, in its discretion and as a condition precedent
to the issuance thereof, require that the owner of such lost,
stolen or destroyed certificate or certificates, or its legal
representative, give the Partnership a bond sufficient to indemnify
the Partnership against any claim that may be made against the
Partnership on account of the alleged loss, theft or destruction of
any certificate or the issuance of such new certificate.
(e) The
Partnership Interests shall be securities under Chapter 8 of
the Uniform Commercial Code.
ARTICLE III
Management
Section 3.01
Management of Partnership .
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(a) The
Limited Partners shall take no part in the management or control of
the Partnership’s business and shall have no authority to act
for or bind the Partnership. The General Partner shall have the
sole discretion and authority, on behalf of and in the name of the
Partnership, to manage and operate the Partnership and perform all
acts and enter into and perform all contracts and other
undertakings that it may deem necessary, advisable or incidental to
the Purposes, and shall have the specific powers set forth in
Section 3.02 below.
(b) The
General Partner shall not be required to devote its full time to
the business of the Partnership, but shall devote so much of its
time and efforts to the affairs of the Partnership as may in its
judgment be necessary to accomplish the purposes of the
Partnership. Nothing herein contained shall prevent the General
Partner or its shareholders, or any Limited Partner or any of their
respective owners, from conducting any other business, whether such
business ventures are in direct or indirect competition with the
Partnership.
Section 3.02
Powers of the General Partner . Without in any way intending
to limit the general powers and authority of the General Partner
set forth in Section 3.01, the General Partner shall have the
right, power and authority, in the name of and on behalf of the
Partnership:
(a) To
acquire any Partnership real or personal property (and to incur all
expenses and enter into all contracts relating thereto);
(b) To incur
indebtedness on behalf of the Partnership, grant security interests
or mortgages in the Partnership property, or pledge any security
interest in the securities or other ownership interests held by the
Partnership;
(c) To
acquire and enter into any contract of insurance that the General
Partner deems necessary or appropriate for the protection of the
Partnership and the General Partner or for any purpose convenient
or beneficial to the Partnership;
(d) To engage
in any transaction with affiliates of the General
Partner;
(e) To employ
persons, whether full-time or part-time, in the operation and
management of the business of the Partnership, on such terms and
for such compensation as the General Partner shall determine,
regardless of whether such persons also may be employed by the
General Partner or its shareholders or other affiliates;
(f) To file,
conduct and defend legal proceedings of any form, including
proceedings against Partners, and to compromise and settle any such
proceedings, or any claims against any person, including claims
against Partners, on whatever terms deemed appropriate by the
General Partner,
(g) To open
brokerage, bank and other accounts and, to the extent that funds
are not invested, to deposit and maintain such funds in the name of
the Partnership in such accounts and to temporarily invest such
funds in short-term United States government securities, money
market accounts and/or other short-term interest bearing
instruments, provided, however, that the Partnership funds shall
not be commingled with the funds of any other person or
entity;
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(h) To cause
the Partnership to make or revoke any of the elections referred to
in Section 754 of the Internal Revenue Code of 1986, as
amended (the “ Code ”), or any similar provision
enacted in lieu thereof;
(i) To select
as its accounting year the period ending December 31 or any
other Fiscal Year as is permitted by the Internal Revenue
Service;
(j) To engage
independent accountants, attorneys, investment managers, brokers,
custodians and such other persons as the General Partner may deem
necessary or advisable;
(k) To
establish and maintain for the conduct of Partnership affairs one
or more offices and in connection therewith rent or acquire office
space, and engage personnel, whether part-time or full-time, and do
such other acts and incur such expenses, as the General Partner may
deem necessary or advisable in connection with maintenance or
administration of such office(s);
(l) To
require a provision in all Partnership contracts that the General
Partner shall not have any personal liability therefor, but that
the person or entity contracting with the Partnership shall be
entitled to any satisfaction only from the Partnership and its
assets;
(m) To
purchase, lease, transfer or sell Partnership assets at such price
or amount for cash, securities or other property and upon such
terms as are deemed in the General Partner’s absolute
discretion to be in the best interests of the
Partnership;
(n) To
prepare, or cause to be prepared, to execute, acknowledge and
deliver any and all instruments to effectuate the business of the
Partnership;
(o) To waive
or reduce, in whole or in part, any notice period, minimum amount
requirement, or other limitation or restriction imposed on Capital
Contributions, withdrawals of capital, any fee, any special
allocation to the General Partner, and/or any requirement imposed
on a Limited Partner by this Agreement, regardless of whether such
notice period, minimum amount, limitation, restriction, fee, or
special allocation, or the waiver or reduction thereof, operates
for the benefit of the Partnership, the General Partner or fewer
than all the Limited Partners;
(p) To
establish such reserves as the General Partner shall, in its sole
but reasonable discretion, deem appropriate to pay current and
future, definite, contingent and possible obligations of the
Partnership; and
(q) To do any
act, engage in any activity or execute any agreement of any nature,
necessary or incidental to the accomplishment of the purposes of
the Partnership in accordance with the provisions of this Agreement
and all applicable federal, state and local laws and
regulations.
Section 3.03
Actions of General Partner . The General Partner is
authorized, directed and empowered to act individually on behalf of
the Partnership, and in accordance therewith, to execute, deliver
and perform all documents and instruments on behalf of the
Partnership. No Person shall be required to inquire into the
authority of the General Partner to bind the
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Partnership. Persons dealing with
the Partnership shall be entitled to rely on a certification by the
General Partner with regard to the authority of any other Person to
act on behalf of the Partnership in any matter.
Section 3.04
Liability and Indemnification .
(a) The
General Partner shall not be liable to the Partnership or any other
Limited Partner for any claims, costs, expenses, damages or losses
arising out of the performance or nonperformance of its duties
under this Agreement, or any action taken or omitted to be taken in
connection with the business and affairs of the Partnership, other
than those directly attributable to its own fraud, gross negligence
or willful disregard of duties.
(b) The
Partnership agrees to indemnify and hold harmless the General
Partner and its shareholders, officers, directors, employees and
agents, if any, from and against any and all claims, actions,
demands, losses, costs, expenses (including attorney’s fees
and other expenses of litigation), damages, penalties or interest,
as a result of any claim or legal proceeding related to any action
taken or omitted to be taken in connection with the business and
affairs of the Partnership (including the settlement of any such
claim or legal proceeding); provided, however, that the party
against whom the claim is made or legal proceeding is directed is
not guilty of gross negligence or willful misconduct as determined
by a final non-appealable court of competent jurisdiction. Any
indemnity under this Section shall be paid from and to the extent
of Partnership assets only, and only to the extent that such
indemnity does not violate applicable Federal and state
laws.
Section 3.05
No Prohibition Against Other Business Ventures . The General
Partner, its shareholders and employees may engage and hold
interests in other business ventures of every kind and description
for their own respective accounts, whether such business ventures
are in direct or indirect competition with the Partnership and
whether the Partnership or any of the Partners also has an interest
therein, without having to account to the Partnership or any
Partner for any profits or other benefits derived therefrom and
without incurring any obligation to offer any interest in any such
activity to the Partnership or any Partner.
Section 3.06
Duty to Keep Books, Financial and Tax Reports .
(a) At all
times during the existence of the Partnership, the General Partner
shall keep true and complete records and books of account, in which
shall be entered fully and accurately each transaction of the
Partnership. The General Partner has the power, in its sole and
absolute discretion, to delegate some or all of the administrative
bookkeeping functions relating to the Partnership to an agent,
which may be the General Partner’s accountants.
(b) The
General Partner shall cause to be prepared and distributed to each
Partner as soon as practicable following each Fiscal Year an annual
financial statement prepared in accordance with generally accepted
accounting principles. The General Partner shall also have prepared
and filed all Federal, state and local income, franchise, gross
receipts, payroll and other tax returns that the Partnership is
obligated to file. Copies of all Partnership tax returns,
information returns or reports shall be available to all Partners
as soon as possible after the close of the Partnership Fiscal Year
at the offices of the Partnership. Copies of Schedule K-1 of
the
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Partnership Tax Return
(Form 1065) shall be distributed to all Partners as soon as
practicable after the Partnership Fiscal Year.
ARTICLE IV
Resignation; Prohibition Against Transfer; Continuation of
Partnership; and Substitution of General Partner
Section 4.01
General Partner Resignation and Involuntary Withdrawal,
Admission of Additional General Partners and Transfer by General
Partner .
(a) The
General Partner shall be permitted to voluntarily withdraw or
resign as the general partner at any time in its absolute and sole
discretion. In the event of dissolution of the General Partner, or
if a voluntary or involuntary petition for bankruptcy shall be
filed by or against the General Partner, or the General Partner
shall make any assignment for the benefit of its creditors,
(collectively, an “ Involuntary Withdrawal ”),
the General Partner or the General Partner’s trustee,
receiver or assignee shall become inactive in the affairs of the
Partnership, shall have none of the rights and powers of a General
Partner hereunder, shall have no authority to act on behalf of the
Partnership or have any voice in the management and operation of
the Partnership.
(b) The
General Partner may admit additional general partners to the
Partnership at such times as the General Partner shall determine,
without the consent of the Limited Partners. Notwithstanding
anything to the contrary, the General Partner shall have the right
to transfer its interest, as the general partner of the
Partnership, to any affiliate of the General Partner, including any
person or entity controlled by the General Partner, controlling the
General Partner or under common control with the General Partner,
without the consent of the Limited Partners. In the event of such
transfer by the General Partner to an affiliate, the General
Partner shall not be deemed to have resigned or withdrawn from the
Partnership for purposes of Section 13.01(b). Any affiliate
transferee of the General Partner under this Section 4.01(b)
shall assume the status of and shall have all of the rights, powers
and obligations that the General Partner possessed prior to such
transfer. The General Partner shall not assign, transfer, sell,
mortgage or otherwise encumber or transfer its interest as the
General Partner of the Partnership except as set forth herein. Any
additional general partner, or transferee of the General Partner as
provided herein, shall execute and acknowledge any and all
instruments that are necessary or appropriate to effect the
admission of any such person or entity as a general partner,
including, without limitation, the written acceptance and adoption
by such person of the provisions of this Agreement.
Section 4.02
Substitute General Partner Requirements . Any substitute
General Partner shall execute and acknowledge any and all
instruments that are necessary or appropriate to effect the
admission of any such person or entity as a substitute General
Partner, including, without limitation, the written acceptance and
adoption by such person of the provisions of this Agreement. Any
successor to such office of General Partner shall assume the status
of and shall have all of the rights, powers and obligations that
the General Partner possessed prior to its withdrawal, resignation
or Involuntary Withdrawal from the Partnership.
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ARTICLE V
Status, Rights, Powers and Voting Rights of Limited
Partners
Section 5.01
Limited Liability . Neither Limited Partner, any Substitute
Limited Partners (as defined herein) nor any Additional Limited
Partners (as defined herein) shall be personally liable or bound
for the expenses, liabilities or obligations of the Partnership
beyond the amount of such Partner’s Capital Contribution (as
defined in Section 8.01 below).
Section 5.02
Return of Capital Contributions . No Limited Partner shall
be entitled to a return of such Limited Partner’s Capital
Contribution or any portion thereof.
Section 5.03
Liability of Limited Partner . No Limited Partner shall be
obligated to provide any contributions to the Partnership other
than the Original Capital Contribution (as defined in
Section 9.02 below) of such Limited Partner. No Limited
Partner shall be obligated to make any loan to the
Partnership.
Section 5.04
Rights of Limited Partners to Inspect Books, Records, and
Partnership Documents . Each Limited Partner shall have the
right to inspect and copy the Partnership’s books and records
at any reasonable time upon reasonable advance written notice, at
such Limited Partner’s sole cost and expense and solely for a
purpose reasonably related to the Limited Partner’s interest
as a Partner, and to receive on demand true and full information
regarding a
