Dominion Citrus Announces Proposed Settlement With Holder of Series A Preference Shares of Dominion Citrus Limited

TORONTO, ONTARIO--(Marketwire - Feb. 28, 2013) - Dominion Citrus Income Fund (the "Fund") (TSX:DOM.UN) and Dominion Citrus Limited (TSX:DMN.PR.A) (the "Company") (collectively, "Dominion Citrus") today announced that their respective boards (the "Boards") have approved, on a without prejudice basis, the terms of a proposed settlement (the "Settlement") with a significant holder of outstanding Series A Preference Shares of the Company (the "Preference Shares"). The Company intends to seek the approval of the holders of Preference Shares by way of special resolution (the "Settlement Resolution") so as to incorporate the terms of the Settlement into the articles of the Preference Shares and make the terms of the Settlement binding upon all holders. The Settlement will have the effect of eliminating the current cash retraction date of April 1, 2013 applicable to the Preference Shares, waiving a portion of the accrued dividends, future dividend rights and substituting repayment of the cash retraction amount over a six (6) year period at which time the Preference Shares shall be redeemed.

Jason Fielden, the President and Chief Executive Officer of Dominion Citrus said, "Addressing this significant liability in a fair and responsible manner that protects the rights of the holders of Preference Shares will allow Dominion Citrus to continue to implement its plans to profitably grow its business for the benefit of all stakeholders."

It is anticipated that, following the Meeting, in the event that the Settlement Resolution is approved, the Company will make voluntary application to delist the Preference Shares from the TSX, thereby realizing additional cost savings.

The Units of the Fund shall continue to be listed and posted for trading on the TSX.

The Boards have had the benefit of advice from a special committee of directors of the Company and trustees of the Fund consisting of Jason Fielden, Eric Skillins and Paul Scarafile, which was constituted to review the various options available to the Company in dealing with this matter, to negotiate with the significant holder of the Preference Shares and its counsel and receive the advice of external legal and financial advisors.

The Directors of the Company (with R. Peter McLaughlin abstaining because of his interest in the Settlement as a holder of Preference Shares) unanimously recommend that Preference Shareholders vote in favour of the approval of the Settlement Resolution at the upcoming special meeting.

Key Terms of Proposed Settlement

The Settlement Agreement will be filed by the Company on www.sedar.com. Certain key features of the Settlement to be implemented by the Settlement Resolution are:

• The Company has agreed to convene a special meeting of the holders of common shares and Preference Shares (the "Meeting") to consider and if thought advisable, approve by special resolution, the amendments to the provisions of the Preference Shares incorporating the terms of the Settlement into the Company's articles of arrangement and thereby make it binding upon all holders. The Meeting is scheduled for March 26, 2013 at 10:00 a.m. at the Doubletree by Hilton Toronto Airport, 655 Dixon Road, Toronto, Ontario. The Company intends to mail proxy materials and an information circular relating to the Meeting on or about March 4, 2013, copies of which shall be filed on www.sedar.com.

• The Company has obtained a commitment from two significant holders of Preference Shares, Solar Harvest Company Ltd. ("Solar") and Greenbriar Holdings Limited ("Greenbriar"), a holding company over which Mr. McLaughlin, a director of the Company and trustee of the Fund, exercises direction (who hold 47.2% and 13.2% of the total outstanding Preference Shares, respectively) to vote in favour of the Settlement Resolution at the Meeting.

• 100% of the aggregate cash retraction price of $2.3 million and $100,000 of the accrued unpaid dividends shall be paid to holders in accordance with the payment schedule set forth below, with the balance of the accrued dividend and future dividend rights being waived.

• The mandatory retraction date of April 1, 2013 shall be deleted and replaced by a payment schedule over six (6) years as follows:

	(i)	Following approval at the Meeting, a one-time only payment of $60,000;
	(ii)	Year 1: August 1, 2013 to May 1, 2014: Four quarterly payments of $60,000;
	(iii)	Year 2: August 1, 2014 to May 1, 2015: Four quarterly payments of $90,000;
	(iv)	Year 3: August 1, 2015 to May 1, 2016: Four quarterly payments of $120,000;
	(v)	Year 4: August 1, 2016 to May 1, 2017: Four quarterly payments of $135,000;
	(vi)	Year 5: August 1, 2017 to May 1, 2018: Four quarterly payments of $155,000; and
	(vii)	Year 6: August 1, 2018 to May 1, 2019: Four quarterly payments of $25,000,

	after which time, the Preference Shares shall be redeemed. The entire balance owing from time to time (the "Preference Shareholders' Remaining Balance") shall become due and payable in the event of a "change of control" of the Company or the Fund. The Preference Shareholders' Remaining Balance may also be prepaid by the Company at any time without notice or penalty.

• The payments under the Preference Shareholders' Remaining Balance shall be secured by an unconditional guarantee of the Fund, with recourse limited to an assignment of approximately $19.2 million aggregate principal amount of secured participating notes issued by the Company to the Fund on December 15, 2009 (the "Notes").

• The Company will agree that annual interest payments on the Notes will not, in the aggregate, exceed the annual payments made to the holders of Preference Shares as set forth above. No payments of principal or interest shall be made under the Notes until the Preference Shareholders' Remaining Balance is repaid in full, other than annual interest payments in accordance with the terms thereof. The Company and the Fund shall acknowledge that, other than in respect of such permitted payments, any amounts received by the Fund on the Notes shall be held in trust on behalf of the holders of Preference Shares up to the Preference Shareholders' Remaining Balance prior to any distribution or amount being released for the benefit of the Fund.

• The Company has agreed, subject to the discretion of the Board, to reimburse holders of Preference Shares for portion of their legal expenses, if any, incurred in connection with reviewing the terms of the Settlement (pro rata in accordance with their holding of Preference Shares). Each of Solar and Greenbriar has agreed to provide the Company and the Fund with a full and final release of any claim it may now or in the future have for certain actions relating to the Preference Shares.

• The Settlement is subject to a number of conditions, including the receipt of the necessary approval of the holders of the Preference Shares at the Meeting, the completion of definitive documentation and the approval of the TSX.

Caution regarding Forward-Looking Statements

This release contains statements, which, to the extent that they are not a recitation of historical fact, may constitute "forward-looking statements". Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or performance, or our underlying assumptions. The words "estimate", "anticipate", "believe", "expect", "intend" or other similar expressions of future or conditional verbs such as "will", "should", "would" and "could" are intended to identify forward-looking statements. Persons reading this press release are cautioned that such statements are only expectations, and that our actual results or performance may be materially different. Forward-looking information involves certain risks, assumptions, uncertainties and other factors which may cause actual future results to differ materially from those expressed or implied in any forward-looking statements. In particular and without limitation, there is no assurance that the Settlement will be implemented on the terms proposed herein or at all as such implementation is uncertain and subject to a number of risks, many of which are beyond the control of the Company or the Fund. The Company and the Fund may suffer material adverse consequences in the event that the Settlement is not implemented.

Readers should not place undue reliance on these forward-looking statements when making decisions, and should consider the date onto which the statements were made. Except as required under applicable securities law, management disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Dominion Citrus

The Fund is a publicly traded, unincorporated, open-ended limited purpose income trust. On January 1, 2006, all of the common shares of the Company were exchanged for trust units of the Fund. The trust units are listed on the TSX under the symbol DOM.UN. The Series A preference shares of the Company are listed on the TSX under the symbol DMN.PR.A.

Dominion Citrus is a diversified food company supplying fresh produce to a wide variety of customers in retail, foodservice and food distribution businesses. Dominion provides procurement, processing, repacking, sorting, grading, warehousing and distribution services to its major domestic markets being Ontario and Québec. Dominion also supplies products to customers in the United States. Dominion Citrus' website may be accessed at www.dominioncitrus.com.