SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1996 Commission File Number 2-95219
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2859087
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
One International Place, Boston, MA 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8600
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
STATEMENT OF OPERATIONS
(UNAUDITED) (NOTE 1)
PART I - FINANCIAL INFORMATION
<TABLE>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Fruit Sales $ - $ - $ 707,598 $4,008,318
Less - Harvesting expenses - - 155,541 1,038,772
Net Fruit Sales - - 552,057 2,969,546
Cost of Fruit Sales - - 257,840 1,769,115
Operating Margin - - 294,217 1,200,431
Other Revenues:
Interest income - 50,609 28,919 126,261
Other Expenses:
Interest expense (Note 3) 161,315 1,018,984 858,496 2,315,461
Grove management fees 13,099 49,416 78,908 150,316
Partnership management fees - 102,105 84,000 252,105
Real estate taxes 88,864 16,314 122,929 48,943
Amortization - 11,416 4,692 34,248
Building depreciation - 2,095 - 6,285
General Administrative - 5,367 53,291 39,829
263,278 1,205,697 1,202,316 2,847,187
Earnings before reorganization items (263,278) (1,155,088) (879,180) (1,520,495)
Reorganization items:
Net fruit sales 18,561 - 2,203,183 -
Cost of sales - - (1,379,966) -
Grove management fees (41,072) - (82,144) -
Partnership management fees (84,000) - (168,000) -
General and administrative (13,164) - (65,248) -
Interest earned on accumulated cash 35,105 - 63,687 -
(84,570) - 571,512 -
Net Income/(Loss) $ (347,848) $(1,155,088) $ (307,668) $(1,520,495)
Net Income/(Loss)
allocated to General Partner $ (34,785) $ (115,509) $ (30,767) $ (152,050)
Net Income/(Loss)
allocated to Limited Partners $ (313,063) $(1,039,579) $ (276,901) $(1,368,445)
Net Income (Loss) per Unit of Limited
Partnership Interest $ (20.20) $ (67.07) $ (17.86) $ ( 88.29)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
BALANCE SHEETS
ASSETS
(NOTE 1)
<TABLE>
September 30, December 31,
1996 1995
(Unaudited) (Audited)
Current Assets:
<S> <C> <C>
Cash and cash equivalents......................................... $ 4,157,130 $ 2,676,875
Accounts receivable............................................... 18,561 329,413
Inventory......................................................... 1,575,903 1,792,035
Other assets...................................................... 22,529 64,660
$ 5,774,123 $ 4,862,983
Property, net......................................................... 17,898,676 18,401,799
Deferred financing costs............................................. - 4,692
$23,672,799 $23,269,474
LIABILITIES AND PARTNERS' CAPITAL
Liabilities Not Subject to Compromise:
Current Liabilities:
Accounts payable-trade ........................................... $ 3,762 $ 33,179
Other liabilities................................................. 122,929 150,331
Total Current Liabilities .................................... 126,691 183,510
Notes payable..................................................... - 22,869,735
Accrued interest.................................................. - 767,970
Liabilities Subject to Compromise (Note 4)............................ 24,405,517 -
24,532,208 23,821,215
Partners' Capital:
Limited Partners, $1,000 stated value per
Unit; 15,500 Units authorized, issued
and outstanding................................................ 377,137 654,038
General Partner................................................... (1,236,546) (1,205,779)
$23,672,799 $23,269,474
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
STATEMENTS OF CASH FLOWS
(UNAUDITED) (NOTE 1)
<TABLE>
NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
Cash Flows From Operating Activities:
<S> <C> <C>
Cash received from customers...................................... $ 673,758 $ 4,107,420
Cash paid to suppliers............................................ ( 252,630) (2,385,609)
Interest received................................................. 28,919 126,261
Interest paid..................................................... ( 149,556) ( 1,623,500)
Net cash provided by operating activities.....................
before reorganization items..................................... 300,491 224,572
Operating cash flows from reorganization items:
Cash received from customers during
reorganization............................................... 3,205,911 -
Interest received on cash accumulated because
of the Chapter 11 proceeding................................. 63,687 -
Cash paid to suppliers during reorganization.......... (1,889,834) -
Interest paid during reorganization............................... (200,000) -
Net cash provided by reorganization items......................... 1,179,764 -
Net cash provided by operating activities......................... 1,480,255 224,572
Cash Flows From Investing Activities:
Capital expenditures.............................................. - (12,353)
Net cash used in investing activities............................. - (12,353)
Net Increase in Cash and Cash
Equivalents....................................................... 1,480,255 212,219
Cash and Cash Equivalents at Beginning
of Period......................................................... 2,676,875 3,124,628
Cash and Cash Equivalents at End of Period............................ $ 4,157,130 $ 3,336,847
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
STATEMENTS OF CASH FLOWS
(CONTINUED)
(UNAUDITED) (NOTE 1)
Reconciliation of net loss to net cash provided by operating activities:
<TABLE>
NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
<S> <C> <C>
Net (Loss) Income $ (307,668) $(1,520,495)
Adjustments to Reconcile
Net Loss to Net Cash Provided
(Used) By Operating Activities:
Depreciation and amortization................................ 4,692 40,533
Decrease (Increase) in:
Accounts receivable..................................... 310,852 99,102
Inventory............................................... 216,132 (17,109)
Other assets............................................ 42,131 16,677
Increase (Decrease) in:
Accrued interest........................................ 508,941 331,962
Accounts payable and other liabilities..... (56,819) 413,964
Postpetition payables and
other liabilities..................................... 258,871 -
Depreciation capitalized to inventory........................ 503,123 499,938
Accrued interest on refinanced
long-term debt............................................. - 360,000
Net Cash Provided by Operating Activities............................. $ 1,480,255 $ 224,572
</TABLE>
Disclosure of accounting policy:
For purposes of the statement of cash flows, the company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED) (NOTE 1)
<TABLE>
Limited Partners General
Units Capital Partner Total
<S> <C> <C> <C> <C>
Balance, December 31, 1995 15,500 $ 654,038 $(1,205,779) $ (551,741)
Net Loss (276,901) (30,767) (307,668)
Balance, September 30, 1996 15,500 $ 377,137 $(1,236,546) $ (859,409)
Balance, December 31, 1994 15,500 $2,256,415 $ (1,027,737) $1,228,678
Net Loss (1,368,445) (152,050) (1,520,495)
Balance, September 30, 1995 15,500 $ 887,970 $(1,179,787) $ (291,817)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (DEBTOR-IN-POSSESSION)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The
Partnership's accounting and financial reporting policies are in
conformity with generally accepted accounting principles and include
all adjustments in interim periods considered necessary for a fair
presentation of the results of operations. Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. It is
suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Registrant's latest annual report on Form 10-K.
The accompanying financial statements reflect the Partnership's results
of operations for an interim period and are not necessarily indicative
of the results of operations for the year ending December 31, 1996.
2. TAXABLE INCOME (LOSS)
The Partnership's taxable loss for 1996 is expected to differ from that
for financial reporting purposes primarily due to accounting
differences in the recognition of results of operations.
3. INTEREST EXPENSE
Interest expense on the Caulkins note has been accrued through March 4,
1996, the date of the Chapter 11 filing. Assuming the same rate of
interest as under the terms of the note, additional interest expense
for the period March 5, 1996 through September 30, 1996 would be
$1,240,503 for a nine months total of $1,618,560.
4. LIABILITIES SUBJECT TO COMPROMISE
Liabilities subject to compromise consist of the following:
<TABLE>
<S> <C>
Secured debt, 8% secured by first mortgage on property $ 8,000,000
Accrued interest on first mortgage 177,283
Secured debt, 14.5% secured by second mortgage on property 14,869,735
Accrued interest on second mortgage 1,099,628
Trade and other miscellaneous claims 258,871
$24,405,517
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Item should be read in conjunction with the financial statements
and other items contained elsewhere in the report.
Liquidity and Capital Resources
The Partnership's only business is owning and operating a commercial
citrus grove consisting of approximately 3,150 acres of land and
related improvements and equipment located near Stuart, Martin County,
Florida (the "Grove"). The two mortgages encumbering the Grove were
scheduled to mature on January 31, 1996. The first mortgage was
extended to May 30, 1996. In February, 1996, the holder of the second
mortgage, Caulkins Citrus Company ("Caulkins"), terminated negotiations
with the Partnership with respect to a loan modification, declared a
default and commenced foreclosure proceedings. In addition, a receiver
was appointed to collect revenues and take over control of the Grove.
On March 4, 1996, as a result of the pending foreclosure proceeding
instituted by Caulkins, the Partnership filed for protection under
Chapter 11 of the United States Bankruptcy Act in the Federal District
Court for the State of Florida, Southern District (Case No.
96-30843-BKC-SHF). In connection with the bankruptcy filing, the
Partnership resumed legal possession of the Grove and its accounts, and
the receiver was removed. The Partnership has submitted its plan of
reorganization to the Bankruptcy Court. The Partnership, however, was
unable to obtain the necessary votes to have its plan of reorganization
approved by the Court. As a result, the Partnership withdrew its plan
of reorganization and the Partnership's creditors are now able to
submit their own plans to the Court. There is a substantial likelihood
that the Partnership will lose the Grove through foreclosure. The
Partnership believes that the Court will not require the Partnership to
disgorge all or any portion of its cash. There can be no assurance,
however, that the Partnership will be able to retain its cash. If the
Grove is foreclosed upon and the Partnership is permitted to retain its
cash, the Partnership will be dissolved and its remaining cash, after
establishment of sufficient reserves, will be distributed to its
partners.
The level of liquidity based on cash and cash equivalents experienced a
$1,480,255 increase at September 30, 1996 as compared to December 31,
1995. This increase is primarily due to the fact that there was no
payment of mortgage principal made during the first nine months of
1996.
The Partnership invests its working capital reserves in a money market
account or repurchase agreements secured by United States Treasury
obligations.
Effective as of June 1, 1996, the Partnership entered into an
agreement with Tropicana Products, Inc. ("Tropicana") pursuant to
which Tropicana agreed to purchase 90% of the oranges produced by the
Grove for a period of ten seasons beginning with the 1997/1998 season.
This agreement provides for the payment to the Partnership for the
oranges of the greater of a floor price and 80% of the price then
being paid by Tropicana on the open market. In addition, the purchase
price is to be adjusted upward at the conclusion of each of the
1999/2000 season, the 2002/2003 season and the 2006/2007 season to the
greater of the three-year weighted average or 103% of the three-year
weighted average of the Florida Citrus Processors Association, an
independent third party.
RESULTS OF OPERATIONS
Operating results improved by $852,827 for the nine months ended
September 30, 1996 as compared to 1995 due to a decrease in interest
expense of $1,456,965, which offset a decrease in the operating margin
on fruit sales of $82,997, a decrease in interest income of $33,655 and
an increase in other expenses of $127,486.
Interest expense decreased by $1,456,965 because no interest was
accrued for the Caulkins note after March 4, 1996, the date of the
Chapter 11 filing. If interest expense on the note had been accrued
through September 30, 1996, there would have been $1,240,503 of
additional expense.
The operating margin on fruit sales decreased by $82,997 for the nine
months ended September 30, 1996 as compared to 1995 due to a decrease
in the number of boxes of fruit harvested during the 1995-96 crop year,
562,170, compared with 740,390 for the 1994-95 crop year, a decrease of
24%. Taking into account the timing of the harvest, the number of boxes
harvested during the calendar year decreased from 558,770 during the
first nine months of 1995, to 449,850 for the same period of 1996. This
decrease was due to adverse weather conditions, and was partially
offset by a slight increase in the price received per pound-solid of
fruit. The harvesting expense per box cost remained constant for the
nine months ended June 30, 1996 as compared to 1995 at approximately
$1.90 per box.
The increase in other expenses of $127,486 was attributable to an
increase in general and administrative expenses of $78,710, and an
increase in real estate taxes of $73,986. The administrative expense
increase was due primarily to legal and other costs related to the
Chapter 11 filing. The increase in real estate tax expense was due to a
county-wide adjustment in the valuation of groves.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10. Fruit Purchase Agreement, dated as of June 1, 1996, between
R Registrant and Tropicana Products, Inc.
27. Financial Data Schedule
(b) Reports of Form 8-K
No Report on Form 8-K was required to be filed for the three
month period ended September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INDIAN RIVER CITRUS INVESTORS
LIMITED PARTNERSHIP
(Registrant)
By: Winthrop Agricultural Management, II, Inc.
General Partners
By: /s/ Edward V. Williams
Edward V. Williams
Chief Financial Officer
By: /s/ Michael Ashner
Michael Ashner
Chief Executive Officer
DATED: November 14, 1996
<PAGE>
EXHIBIT INDEX
10. Fruit Purchase Agreement, dated as of June 1, 1996,
between Registrant and Tropicana Products, Inc.
27. Financial Data Schedule
Agreement Date: June 1, 1996 ; Agreement Number: C-282-28
Agreement between INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP ("Grower")
and Tropicana Products, Inc. ("Tropicana");
For the term of ten Season(s) beginning with the 1997/98 Season and ending with
the end of the 2006/07 Season;
For all Fruit (as defined herein) from the following specified groves
("Groves"), or such other quantity as specified below:
All HAMLIN, PINEAPPLE and VALENCIA oranges produced on the Groves located on the
land identified in Exhibit A.
For further information, see attached ADDENDUM.
TROPICANA PRODUCTS, INC.
FRUIT PURCHASE AGREEMENT
THIS AGREEMENT, made the date set forth on the cover page hereof between
TROPICANA PRODUCTS, INC., a Delaware corporation having its principal office in
Bradenton, Florida ("Tropicana"), and Indian River Citrus Investors Limited
Partnership, Grower.
W I T N E S S E T H:
1. TERM:
This Agreement is for the Season(s) set forth on the cover page hereof. A
Season shall be the period from September 1 through August 31 of each year.
2. SALE:
In consideration of the mutual promises contained herein and the market
provided by Tropicana, Grower agrees to sell to Tropicana, from the Groves
all early, midseason and Valencia oranges set forth on the over page
hereof (the "Fruit"). Early and midseason fruit are sometimes hereinafter
referred to as "Category One Fruit" and Valencias are sometimes
hereinafter referred to as "Category Two Fruit". As reflected in Section
6. below, the term "Fruit" does not include and Tropicana will not be
required to accept Ambersweets, Temples, Murcotts, Tangelos, and Navel
Oranges.
3. PRICING:
The price per pound of soluble orange juice solids ("pound solids") for
Fruit delivered to and accepted by Tropicana in each Season shall be the
applicable Reference Price, and shall be paid in accordance with Section
4. The Reference Price for each Season shall be calculated as follows:
A. Tropicana shall determine the higher of:
1. the average actual price paid by Tropicana per pound solids for
Grade A 65(degree)brix equivalent bulk orange juice concentrate
for the period beginning December of each Season and ending the
following November (each, a "Selling Period"), computed by
averaging the monthly average of such prices for the Selling
Period. The monthly average of such prices shall be calculated by
dividing the aggregate actual prices per pound solids paid by
Tropicana in each month by the number of purchases made in such
month. In any month in which Tropicana does not purchase bulk
orange juice concentrate, the monthly average for such month for
purposes of the foregoing calculation shall be the monthly
average of the near-term contract month frozen concentrate orange
juice futures daily closing prices, published by the Citrus
Associates of the New York Cotton Exchange (subject to adjustment
as provided in subparagraph 2. below). From the foregoing,
Tropicana shall deduct the industry representative cost to
convert round oranges to concentrate net of by-product
realization (the "Cost of Processing"). For purposes of this
Agreement, the Cost of Processing for the 1997/98 Selling Period
is $0.16 per pound solids, which shall be adjusted (a) in each
subsequent Selling Period for inflation by an amount equal to the
annual percentage change in the Producer Price Index for Total
Finished Goods as reported by the U.S. Department of Labor,
Bureau of Labor Statistics ("PPI") as of the most recent date of
determination prior to the end of such Selling Period as compared
to the PPI as of the most recent date of determination prior to
the end of the immediately preceding Selling Period and (b) upon
the effectiveness of any law, regulation, tax (including taxes on
Fruit to be processed) or other contingency beyond the control of
Tropicana and Grower that materially affects the Cost of
Processing; and processed) or other contingency beyond the
control of Tropicana and Grower that materially affects the Cost
2. the average for the Selling Period of the near-term contract
month frozen concentrate orange juice futures daily closing
prices, published by the Citrus Associates of the New York
Cotton Exchange, less the applicable Cost of Processing per
paragraph 3.A.1. above. Such average price shall be adjusted as
appropriate to reflect changes in the terms of frozen
concentrate orange juice futures contracts traded on the New
York Cotton Exchange from the terms in effect on the date
hereof.
B. 1. The Reference Price of Category One Fruit shall be 98% of the amount
calculated in Section 3.A. above.
2. The Reference Price of Category Two Fruit shall be 102% of the amount
calculated in Section 3.A. above.
C. In making the calculations set forth in Section 3.A.1., concentrate
purchases shall not include concentrate delivered to Tropicana under
contracts for single strength orange juice.
4. PAYMENT:
The Fruit is to be paid for as follows:
A. Following delivery as directed by Tropicana and acceptance by
Tropicana, Tropicana will advance Grower, subject to the deductions
set forth below in this Section 4.A., weekly for all Fruit delivered
to and accepted by Tropicana during that week 80% of the scale fruit
price per pound solids posted by Tropicana at the time of delivery.
The foregoing amount, without giving effect to the deductions set
forth in the next succeeding sentence, shall be known as the
"Tentative Price". If the Fruit has been picked, loaded or
transported, or a combination thereof, by a person contracted with by
Tropicana, the actual costs of such services, plus a reasonable
administrative fee reflecting costs incurred by Tropicana in
arranging this service, will be deducted from the Tentative Price
before payment is made.
B. On or before the December 31 following each Season, Tropicana will
pay Grower, for all Fruit delivered to and accepted by Tropicana
during that Season, the remainder, if any, of the Reference Price
applicable to such Fruit for such Season and not paid pursuant to
Section 4.A.
C. If the Tentative Price for all Fruit delivered to and accepted by
Tropicana during any Season shall exceed the applicable Reference
Price for such Fruit, Tropicana shall consider the amount represented
by the difference between such prices to be an advance to the Grower.
The advance shall be repaid by Grower to Tropicana within thirty (30)
days of Grower receiving notification of balance due Tropicana.
5. MERCHANTABILITY:
The Fruit delivered by Grower shall be of good, wholesome, merchantable
and marketable quality for oranges purchased for concentrate processing,
as those terms are used in the citrus industry. Furthermore, the quality
of the Fruit must also meet all applicable federal and state laws and
regulations, including, but not limited to, requirements that residues of
fertilizers, pesticides, and other chemicals commonly used in the citrus
industry do not exceed federal or state limits and that required waiting
periods following application of such chemicals must have expired before
delivery to Tropicana.
6. STANDARDS OF ACCEPTABLE FRUIT:
The Fruit delivered to Tropicana shall comply with the following minimum
standards of quality:
o Pass government inspection
o 2" minimum diameter
o 10.0 degree brix or higher
o Brix to acid ratio of 12 to 1 or higher until January 1st of a Season
o Brix to acid ratio of 13 to 1 or higher from January 1st of a Season
Tropicana will not be required to accept any Ambersweets, Temples,
Murcotts, Tangelos, or Navel Oranges and the foregoing expressly are
excluded from the definition of "Fruit" herein. Tropicana may, at its
discretion, declare Fruit not meeting the minimum standards to be
acceptable and, in such event, all other terms of this Agreement,
including, but not limited to, the provisions relating to price and the
obligation of Grower to sell, transfer, or deliver the Fruit exclusively
to Tropicana, shall apply.
7. PICKING AND DELIVERY OF FRUIT:
The Fruit is to be picked by Grower and is to be delivered by Grower to a
Tropicana processing plant or to a processing plant designated by
Tropicana. If Grower shall be unable to pick, load or transport the fruit,
Tropicana may contract with a person in the business of picking, loading
or transporting Fruit to do so, charging the Grower the actual costs of
this service plus a reasonable administrative fee reflecting costs
incurred by Tropicana in arranging this service. No right of Tropicana
stated by this Section shall obligate Tropicana to pick, load, or
transport the Fruit. Tropicana shall have the unrestricted right to
determine hours of operation, including the dates of opening and closing
its processing plants. The Fruit shall be delivered where and when
designated by Tropicana, but Tropicana will use reasonable efforts to
accommodate its schedule to the convenience of Grower, except as provided
in Sections 11 and 12. No Fruit shall be delivered after July 15 of any
Season or such other date established by Tropicana and communicated to
Grower at least fourteen (14) days prior to such date without the written
consent of Tropicana.
8. ACCEPTANCE OF FRUIT; RISK OF LOSS:
The loading of Fruit upon a carrier contracted with by Tropicana shall not
constitute acceptance of the Fruit by Tropicana. Until shipments of Fruit
are accepted at one of Tropicana's processing facilities, or at a facility
designated by Tropicana, all risk of loss shall be borne by Grower. Title
and risk of loss shall pass to Tropicana only upon acceptance of the
Fruit. Acceptance shall occur when Fruit is inspected and approved by an
authorized government inspector. Fruit will not be held on Tropicana's
yard for an unreasonable amount of time.
9. DETERMINATION OF TYPE OR QUANTITY OF FRUIT RECEIVED:
Any determination as to classification or quantity of Fruit received, or
as to pound solids, shall be as reported by daily tests made by authorized
government inspectors, stationed at Tropicana or at the plant to which
Tropicana has directed delivery be made.
10. ACCESS:
Tropicana shall have access to the Groves to inspect Fruit and plantings,
during reasonable business hours and upon reasonable notice to Grower.
Both parties will exchange pertinent information including crop estimates,
planting densities, types and ages of trees, diseases, brix levels,
ratios, maturity dates, soil tests, planting plans, and all other relevant
matters. Tropicana shall also have reasonable access during normal
business hours to inspect such records of the Grower relating to the Fruit
and the Groves.
11. FORCE MAJEURE:
In the event of freeze, hurricane or other Act of God, fire, strike,
unavailability of labor, governmental law, directive or regulation or any
contingency beyond the reasonable control of the affected party so that
the affected party cannot perform its obligations hereunder ("Force
Majeure"), the affected party will be relieved of any duty to perform its
obligations hereunder and if Tropicana is the affected party, it will
notify Grower that Grower may sell such Fruit elsewhere.
<PAGE>
12. PROCESSING PREFERENCE IN EVENT OF FORCE MAJEURE:
Grower understands and agrees that in the event of a Force Majeure,
growers under agreement with Tropicana may make demands on Tropicana for
fruit processing that exceed Tropicana's processing capabilities. In such
event, Tropicana shall allocate deliveries in its sole discretion. Such
allocation shall not constitute an inability or refusal to perform, or a
breach of this Agreement by Tropicana.
13. REPRESENTATIONS AND WARRANTIES:
Grower hereby represents and warrants to Tropicana that during the term of
this Agreement:
A. Grower is the owner of the Groves described herein and has good title
to the Groves and the Fruit produced from them.
B. Grower has not and shall not, sell, or agree to sell, except as
authorized pursuant to this Agreement, Fruit which is subject to this
Agreement to anyone other than Tropicana; and that Grower has full
power, right and authority to enter into this Agreement and to sell
and deliver Fruit in accordance with this Agreement.
C. Grower has all necessary powers and all federal, state and local
licenses and permits, including, without limitation, water and
environmental permits, necessary to own and cultivate the Groves and
to perform its obligations under this Agreement.
D. Grower is in compliance with all local, state and Federal labor and
employment laws, including, but not limited to Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment
Act, the Americans with Disabilities Act, the Fair Labor Standards
Acts, the Work or Adjustment Retraining and Notification Act, the
Occupational Safety and Health Act of 1979, as amended, Executive
Order 11246, as amended, and the Employee Retirement Income Security
Act of 1974, as amended, and any rules and regulations relating to
said laws.
14. BINDING EFFECT:
The individuals signing this Agreement on behalf of Grower and Tropicana
represent that they have the authority to do so. This Agreement will be
binding upon Tropicana only after it has been executed by an officer of
Tropicana. If a sale or assignment of this Agreement is permitted under
the provisions of Section 14 below, all covenants and provisions of the
Agreement shall be binding upon and inure to the benefit of the personal
representatives, successors, and assigns of the parties.
15. ASSIGNMENT; SUCCESSORS; SALE OF GROVES:
THE IDENTITY OF THE INDIVIDUAL OR INDIVIDUALS WITH WHOM TROPICANA HAS
CONTRACTED IS A MATERIAL ASPECT OF THIS AGREEMENT. THEREFORE, THIS
AGREEMENT MAY NOT BE ASSIGNED OR TRANSFERRED BY GROWER WITHOUT THE PRIOR
WRITTEN CONSENT OF TROPICANA. ANY PURPORTED ASSIGNMENT MADE IN
CONTRAVENTION OF THIS SECTION SHALL BE NULL AND VOID. In the event of the
sale of the Groves or change in the identity of 51% or more of the
ownership of the Groves or principals or shareholders of Grower (if a
partnership or corporation), Tropicana shall have the right to terminate
this Agreement forthwith without liability to either party or to enforce
this Agreement against Grower or its successor. This Agreement may be
assigned or transferred by Tropicana.
16. DISPUTES:
No dispute, breach, or alleged breach of this Agreement shall relieve
Grower of its obligation to deliver Fruit, and repay all indebtedness, or
Tropicana of its obligation to accept and pay for Fruit; provided however,
either party may perform its obligations under protest subject to the
right to seek judicial resolution of the dispute, breach, or alleged
breach.
<PAGE>
17. REMEDIES:
Due to the variable, uncertain, and unstable nature of citrus markets, and
supply of Fruit, Grower and Tropicana recognize and agree that a default
or a breach in one party's obligations hereunder will result in damages to
the other party that are uncertain and not easily susceptible to proof. It
is the intent of Grower and Tropicana to liquidate damages in advance of
any such default or breach. Accordingly, if Grower fails to deliver the
Fruit to Tropicana or Tropicana fails to purchase, pursuant to the terms
of this Agreement, the party which has breached its obligations hereunder
shall pay to the other party as liquidated damages and not a penalty:
A. the sum of $2.00 per ninety (90) pound box of Fruit not so delivered
or purchased, as the case may be; or
B. if greater, in the case of Grower's failure to deliver the Fruit as
provided herein, twenty percent (20%) of the price, or equivalent
other consideration received by Grower for the transfer, assignment,
sale, or delivery of Fruit to anyone other than Tropicana.
Grower agrees that notwithstanding the foregoing liquidated damages
provision, that damages at law will be an insufficient remedy to
Tropicana, in the event that Grower fails to deliver the fruit to
Tropicana, and that Tropicana shall be entitled, upon application to a
Court of competent jurisdiction, to obtain specific performance or
injunctive relief to enforce the provisions of this Agreement requiring
the delivery of the fruit to Tropicana, which specific performance or
injunctive relief shall be in addition to Tropicana's right to liquidated
damages set forth above, and any other rights or remedies available to
Tropicana, it being the intent of the parties that all remedies specified
herein shall be cumulative and in addition to other or further remedies
provided by law or equity.
18. ATTORNEY'S FEES AND EXPENSE OF LITIGATION:
It is also agreed that should either party be required to bring legal
action to enforce the terms of this Agreement, the prevailing party shall
be entitled to its reasonable attorney's fees, together with all costs and
expenses of litigation, up to and including appeals.
19. SECURITY INTEREST AND LIEN:
Pursuant to Chapter 679, Florida Statutes, Grower hereby grants to
Tropicana a security interest in the Fruit to secure repayment of all
amounts considered advances hereunder and to secure performance of all
obligations hereunder. Grower also grants to Tropicana a lien on the Fruit
pursuant to Section 713.71, Florida Statutes, to secure repayment of all
amounts considered advances hereunder. At the request of Tropicana, Grower
shall execute from time to time any further documents or instruments which
Tropicana deems necessary or advisable to secure or perfect a security
interest or lien on the Fruit. Grower agrees to allow Tropicana to post
signs or notices in the Groves, which Grower shall not remove, and to take
such other reasonable steps as may be necessary or advisable to notify
others that Tropicana holds a security interest in the Fruit.
20. TAXES AND OTHER CHARGES:
A. Any State, Federal or other tax or charge of any nature levied
against Fruit from the Groves processed by Tropicana shall be
paid by Grower.
B. Grower shall be responsible for all trailer unloading fees at a
cost of $10.00 per trailer.
21. SETTLEMENT OF AMOUNTS DUE:
The parties shall settle by payment the amounts due between them within
thirty (30) days of the date due for all payments for which the date of
payment is not specifically provided for herein.
<PAGE>
22. ENTIRE AGREEMENT; WAIVERS; AMENDMENTS OR MODIFICATIONS:
This Agreement constitutes the entire agreement of the parties hereto and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties. No waiver of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provisions, nor shall any waiver constitute a continuing waiver. This
Agreement may not be supplemented, altered, modified or amended or
otherwise changed except by an instrument in writing signed by an officer
of the party against whom such supplement, alteration, modification,
amendment or other change is sought to be enforced. The course of dealing
or course of performance between the parties hereto shall not commit
either party to duties or obligations which are not expressly stated by
this Agreement.
23. SEVERABILITY:
If any provision of this Agreement or any application of it shall be
judicially declared to be invalid or unenforceable, the remainder of this
Agreement and any other application of such provision shall not be
affected by such invalidity or unenforceability; provided, however, that
if any provision regarding price shall be held to be invalid or
unenforceable then this entire Agreement and all provisions hereof shall
be invalid and unenforceable.
24. GOVERNING LAW:
This Agreement shall be construed in accordance with, and governed by the
laws of, the State of Florida.
25. VENUE:
Tropicana and Grower agree that should legal action be brought to enforce
the terms of this Agreement, it shall be brought only in Bradenton,
Manatee County, Florida.
26. NOTICE:
Any notice, request, consent, waiver or other communication required or
permitted hereunder shall be effective only if it is in writing and
personally delivered, sent by certified or registered mail, postage
prepaid, sent by a nationally recognized overnight courier service or sent
by facsimile transmission, charges prepaid, addressed as set forth below:
Tropicana: Tropicana Products, Inc.
P.O. Box 338
Bradenton, Florida 34206
Attention: Vice President--Procurement
Facsimile No: 813-742-2014
Grower: Name and address as set forth on signature page
or such other address as either party may have specified in a notice duly
given to the other party as provided herein. Notice given by facsimile
transmission and by personal delivery shall be deemed given upon receipt.
Notice given by certified or registered mail or by overnight courier
service shall be deemed given upon sending.
WITNESSES:
INDIAN RIVER CITRUS INVESTORS
LIMITED PARTNERSHIP
Grower or his Authorized Agent
Address:
Facsimile:
TROPICANA PRODUCTS, INC.
By:
Kenneth R. Diveley
Senior Vice President
<PAGE>
[PARTNERSHIP]
GROWER'S AFFIDAVIT
STATE OF FLORIDA
COUNTY OF ______________ ss:
I HEREBY CERTIFY, that on this date ______________, 19__ before me
personally appeared _________________________ to me known and known to me to be
the person who signed the foregoing instrument and, who being by me duly sworn,
declared that he is a general partner of ______________ and that he signed the
foregoing document as a general partner of the aforementioned partnership and
acknowledged the execution thereof to be his free act and deed for the uses and
purposes therein mentioned.
WITNESS my signature and official seal at ___________ in the County of
_____________ and State of ____________________ the day and year last aforesaid.
Notary Public
My Commission Expires:
EXHIBIT B
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP (IRCI)
Periodic Price Adjustment Formula
Early/Mids Valencias
1. A. Year 1 Growing Season
TROPICANA Price Paid to IRCI ____________ ____________
x Pounds of Solids IRCI sold
TROPICANA under this agreement ____________ ____________
Year 1 TROPICANA Value ____________ ____________
B. Year 2 Growing Season
TROPICANA Price Paid to IRCI ____________ ____________
x Pounds of Solids IRCI sold
TROPICANA under this agreement ____________ ____________
Year 2 TROPICANA Value ____________ ____________
C. Year 3 Growing Season
TROPICANA Price Paid to IRCI ____________ ____________
x Pounds of Solids IRCI sold
TROPICANA under this agreement ____________ ____________
Year 3 TROPICANA Value ____________ ____________
2. Total TROPICANA Value
A. Year 1 TROPICANA Value ____________ ____________
B. Year 2 TROPICANA Value ____________ ____________
C. Year 3 TROPICANA Value ____________ ____________
D. TOTAL TROPICANA VALUE ____________ ____________
<PAGE>
Early/Mids Valencias
3. 3-Year Total Pounds of Solids IRCI sold
TROPICANA under this agreement
A. Year 1 ____________ ____________
B. Year 2 ____________ ____________
C. Year 3 ____________ ____________
D. TOTAL ____________ ____________
4. Weighted Average TROPICANA Price
Total TROPICANA Value (2.D) ____________ ____________
: Total Pounds of Solids (3.D) ____________ ____________
= Weighted Average TROPICANA Price ____________ ____________
5. A. Year 1 Growing Season
Canners Average Price ____________ ____________
x 1.03 ____________
= Comparative Price ____________ ____________
x Pounds of Solids IRCI sold
TROPICANA under this agreement ____________ ____________
= Year 1 Adjusted Comparative Value ____________ ____________
B. Year 2 Growing Season
Canners Average Price ____________ ____________
x 1.03 ____________
= Comparative Price ____________ ____________
x Pounds of Solids IRCI sold
TROPICANA under this agreement ____________ ____________
= Year 2 Adjusted Comparative Value ____________ ____________
C. Year 3 Growing Season Early/Mids Valencias
Canners Average Price ____________ ____________
x 1.03 ____________
= Comparative Price ____________ ____________
x Pounds of Solids IRCI sold
TROPICANA under this agreement ____________ ____________
= Year 3 Adjusted Comparative Value ____________ ____________
6. Total Adjusted Comparative Value
A. Year 1 Adjusted Comparative Value ____________ ____________
B. Year 2 Adjusted Comparative Value ____________ ____________
C. Year 3 Adjusted Comparative Value ____________ ____________
D. Total Adjusted Comparative Value ____________ ____________
7. Weighted Average Adjusted Comparative Price
Total Adjusted Comparative Value (6.D) ____________ ____________
: Total Pounds of Solids (3.D) ____________ ____________
= Weighted Average Adjusted Comparative
Price ____________ ____________
8. Weighted Average Adjusted Comparative
Price (7) ____________ ____________
- Weighted Average TROPICANA Price ____________ ____________
= Adjustment Factor ____________ ____________
9. Adjustment Factor (8) ____________ ____________
x Total Pounds of Solids (3.D) ____________ ____________
= Gross Adjustment ____________ ____________
<PAGE>
10. Early/Midseason Gross Adjustment (9) ____________
+ Valencia Gross Adjustment (9) ____________
= Net Adjustment due Grower ____________
ADDENDUM
ADDENDUM to Tropicana Products, Inc.'s Fruit Purchase Agreement # C-284-28
("Agreement") dated June 1, 1996 with Indian River Citrus Investors Limited
Partnership (Grower).
Where this ADDENDUM may be inconsistent with the printed portion of the
Agreement, the terms of the ADDENDUM shall prevail.
1. Buyer's "tentative price" paid to Grower shall be the greater of:
(a) One-hundred percent (100%) of the Floor Price for each season as
specified in Paragraph 2 below, less applicable taxes and deductions
as provided in the Agreement, upon acceptance of fruit subject to the
Agreement at Buyer's plant, or
(b) Eighty percent (80%) of Buyer's posted spot market price per pound
solids, less applicable taxes and deductions as provided in the
Agreement, upon acceptance of fruit subject to the Agreement at
Buyer's plant.
2. The calculations and payment, as provided in Paragraphs 3 and 4 of the
Agreement, shall be modified to provide for payment of the higher of:
(a) The minimum or Floor price of not less than:
Early/Midseason Valencias
1997/98 Season
through $0.90/lb. solids $1.00/lb. solids
2006/07 Season
or
(b) The Final Net Price as provided in the Agreement.
or
(c) The Net Adjusted Price as provided in Paragraph 5 of this Addendum.
3. Volume of fruit to be delivered shall be equal to 90% of all round oranges
produced on groves identified in Exhibit A.
4. Tropicana shall provide Grower a cull rebate based on average culls between
2% and 4%. These cull rates will be based on the average of each variety
for the entire season. Such rebate shall be equal to the respective
Early/Midseason and Valencia orange final payout for the pounds solid value
of culls over 2%, but less than 4%, respectively. The rebate amount shall
be made at the time of the final payment.
ADDENDUM to Fruit Purchase Agreement # C-284-28
5. The price for both Category One and Category Two fruit shall be adjusted
upward to the higher of the three-year weighted average price Buyer has
already paid Grower, or 103% of the three-year weighted average FCPA
(Canners) average price as described in Exhibit B. This adjustment shall be
computed and applied on three occasions: At the conclusion of the 1999/2000
season, at the conclusion of the 2002/03 season, and at the conclusion of
the 2006/07 season.
<PAGE>
The adjustment is based on the periodic average of the Florida Citrus
Processors Association (Canners) Average price for the periods defined
above. For purposes of this adjustment, the "FCOJ Priced", "Final Prices
Combined, "Per Pound Solids" will be used.
INDIAN RIVER CITRUS INVESTORS
LIMITED PARTNERSHIP
(Grower)
Date Richard Mims
TROPICANA PRODUCTS, INC.
(Buyer)
Date Kenneth R. Diveley
Senior Vice President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
nine month period ending September 30, 1996 and is
qualified in its entirety by reference to such financial
statements
</LEGEND>
<CIK> 0000760612
<NAME> INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 4157130
<SECURITIES> 0
<RECEIVABLES> 18561
<ALLOWANCES> 0
<INVENTORY> 1575903
<CURRENT-ASSETS> 22529
<PP&E> 24469930
<DEPRECIATION> (6571254)
<TOTAL-ASSETS> 23672799
<CURRENT-LIABILITIES> 385562
<BONDS> 22869735
<COMMON> 0
0
0
<OTHER-SE> (859409)
<TOTAL-LIABILITY-AND-EQUITY> 23672799
<SALES> 3561636
<TOTAL-REVENUES> 3654242
<CGS> 1637806
<TOTAL-COSTS> 2444202
<OTHER-EXPENSES> 659212
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 858496
<INCOME-PRETAX> (307668)
<INCOME-TAX> 0
<INCOME-CONTINUING> (307668)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (307668)
<EPS-PRIMARY> (17.86)
<EPS-DILUTED> 00.00
</TABLE>
