The Seed Capital Units in FNA Fertilizer Limited Partnership (the “Limited Partnership”) raised to date have created a very successful start to ProjectN. In fact, it has exceeded our expectations. The purpose of this letter is to provide you notice of (i) the imminent closing of the opportunity to subscribe for the current Seed Capital Units, (ii) the subsequent opening of an opportunity to subscribe for a new series of Seed Capital Units, and (iii) amendments to be made to the Limited Partnership Agreement primarily required to address these changes. These items are described in further detail in the remainder of this letter.
Closing of Series 1 and Opening of Series 2 Subscriptions
Effective December 31, 2012, subscriptions for the current Seed Capital Units in the Limited Partnership will close. The Seed Capital Units issued on and prior to that date will be reclassified as Series 1 Seed Capital Units. Seed Capital Units issued on and after January 1, 2013 will be classified as Series 2 Seed Capital Units. In order for a subscriber to receive Series 1 Seed Capital Units, the appropriate subscription form must be completed, executed and received by the General Partner by 5:00 PM (Central) on December 31, 2012, and all other subscription requirements met.
Series 1 and Series 2 Attributes
With one exception, the Series 2 Seed Capital Units will have the same attributes as the Series 1 Seed Capital Units. The exception is that the right to receive compensation in the event of the project not proceeding ahead as planned, which is a right currently carried by the Seed Capital Units, will not apply to the new Series 2 Seed Capital Units. The currently outstanding Seed Capital Units, once reclassified as Series 1 Seed Capital Units, will however continue to carry such right.
Amendment of the Limited Partnership Agreement
In accordance with section 3.8 The Limited Partnership Agreement for FNA Fertilizer Limited Partnership has been amended and restated to create the two series of Seed Capital Units. The Amended and Restated Limited Partnership Agreement can be found at the ProjectN website at www.ProjectN.ca. Please read it carefully for a full understanding of all changes to be implemented, as not all are described specifically in this letter.
In particular, amendments have been made to Section 10.1(b) so that on a Winding-Up Event (as defined in the Agreement) Series 1 Seed Capital Units will continue to have a right to elect to receive a $600 AgraCity account credit or 1 year extension of the limited partner’s FNA membership. These benefits are provided, respectively, by AgraCity and FNA through contractual arrangements with the Limited Partnership.
Reasons for Separation of Series 1 and Series 2
The separation of Series 1 and Series 2 Seed Capital Units is being made to recognize the higher risk the initial group of investors (approximately 1000+ in number) have taken in their opening investment in the Limited Partnership. Subsequent investors, or subsequent investment by the same investors, carry a lower risk and therefore will not maintain the same attributes. The ProjectN team extends their appreciation to all Limited Partners already holding Seed Capital Units (to be Series 1 Seed Capital Units). Their foresight and early support was vital to take ProjectN to the next phase in its development.
Please note that the subscription form relating to the existing Seed Capital Units will be removed from the ProjectN website at www.ProjectN.ca effective Dec. 20th, 2012. Subscriptions for Series 1 Seed Capital Units will however be accepted if received prior to 5:00PM (Central) on Dec. 31st, 2012. Please take into account the delay caused by the slower mail and courier service during holiday period in this respect.
Although Series 2 Seed Capital Units will not entitle their holders to the assured benefit of compensation in the event that the project does not proceed, with already more than 1,200 FNA members participating in the Limited Partnership and over 5000 Seed Capital Units purchased to date, we believe that the opportunity to become a stakeholder in ProjectN through the Series 2 Seed Capital Unit offering will continue to be a compelling investment opportunity, as such units will continue to carry all other benefits and attributes of the existing Seed Capital Units. Documentation relating to the Series 2 Seed Capital Units will be available for download from www.ProjectN.ca effective Jan. 2nd, 2013.
Thank you for your support of ProjectN!