Clearwater Seafoods announces proposal to amend terms of 7% Convertible
Debentures

With compelling benefits for Debentureholders, Board unanimously recommends that Debentureholders vote FOR amendments

/NOT FOR DISTRIBUTION TO UNITED STATES OR FOR DISSEMINATION IN THE UNITED STATES/

HALIFAX, Oct. 7 /CNW/ - (TSX: CLR.UN, CLR.DB, CLR.DB.A): Clearwater Seafoods Income Fund (the "Fund") announces that it intends to seek the approval of the holders of its 7% convertible unsecured subordinated debentures, due December 31, 2010 (the "2010 Debentures"), to amend the terms at a meeting of 2010 Debenture holders (the "Debentureholders") to be held on November 12, 2010 (the "Meeting"). There are a number of compelling benefits to Debentureholders and if successful, Clearwater Seafoods Limited Partnership ("Clearwater") will affect a similar extension of its Class C Units.

The proposed amendments (the "Debenture Amendments") and benefits to Debentureholders include:

    
    - Higher Interest rate: The proposed amendments provide Debentureholders
      with an interest rate that will be increased by 3.5% from 7.0% to
      10.5%.
    - Lower Conversion Price: The conversion price will be reduced from
      $12.25 per Fund unit ("Fund Unit") to $3.25 per Fund Unit.
    - Extended Term: The maturity date will be extended from December 31,
      2010 to December 31, 2013, and the amended debentures will not be
      redeemable prior to June 30, 2011. As such, Debentureholders will have
      a longer period of time to receive a higher interest rate and potential
      to exchange their debenture for equity in an entity that is poised to
      create significant value for unitholders.
    

Lock-up agreements

As part of the determination of these revised terms, Clearwater has executed lock-up agreements with several of the largest holders of its convertible debentures under which these holders have agreed to vote in favour of the revised terms. Clearwater has also received the support of several individual debentureholders with large holdings who have indicated that they favour this proposal.

Board recommendation

The Board of Trustees of the Fund (the "Board") believe that the Debenture Amendments provide a number of benefits to the Debentureholders and all securityholders. The increased interest rate and lower conversion price offer attractive value to Debentureholders.

    
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     THE BOARD UNANIMOUSLY RECOMMENDS THAT THE DEBENTUREHOLDERS CONSENT
                    TO/VOTE FOR THE DEBENTURE AMENDMENTS.
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Mr. Ian Smith, CEO of Clearwater stated "I believe Clearwater is poised to deliver improved operating margins and earnings performance through the balance of 2010. Furthermore, I believe that the strategy we outlined in our second quarter MD&A will result in improved results in the near-term and provide us with a sustainable competitive advantage in the mid to longer term. We are pleased to offer our Debentureholders the opportunity to participate in our success by receiving a higher coupon and a lower conversion price. Furthermore, we believe that with our positive earnings trend and our strategy of reducing leverage, we are positioned to deliver increasing value to both our Debentureholders and our unitholders."

About the Debenture Amendments

Further information with respect to the Debenture Amendments as well as voting instructions will be outlined in a management information circular (the "Circular") expected to be mailed to the Debentureholders around October 21, 2010.

For the Debenture Amendments to be approved, at least 66 2/3% of the principal amount of the 2010 Debentures voted (either in person at the Meeting or by proxy) must be FOR votes. Debentureholders may vote FOR the Debenture Amendments either by: (1) voting in person at the Meeting or (2) submitting their proxy. Detailed voting instructions will be found in the Circular. The Meeting is scheduled to be held at 1969 Upper Water Street, Suite 1300, Halifax, Nova Scotia on November 12, 2010 10:00 a.m. (Atlantic Standard Time).

Cormark Securities Inc. is acting as financial advisor in respect of the transaction. McInnes Cooper is acting as Canadian legal counsel to Clearwater and the Fund.

About Clearwater

Clearwater is recognized for its consistent quality, wide diversity and reliable delivery of premium seafood, including scallops, lobster, clams, coldwater shrimp, crab and ground fish.

Since its founding in 1976, Clearwater has invested in science, people, technology, resource ownership and resource management to preserve and grow its seafood resource. This commitment has allowed it to remain a leader in the global seafood market.

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For further information: Robert Wight, Chief Financial Officer, Clearwater, [phone]; Tyrone Cotie, Director of Corporate Finance and Investor Relations, Clearwater, [phone]