K-BRO ANNOUNCES PLAN TO CONVERT TO CORPORATION

(TSX: KBL.UN)

EDMONTON, Oct. 21 /CNW/ - K-Bro Linen Income Fund ("K-Bro") is pleased to announce the proposed conversion of K-Bro from an income trust to a corporation (the "Conversion") and will seek unitholder approval for the Conversion at a special meeting of holders ("Unitholders") of trust units ("Trust Units") and special trust units of K-Bro to be held on December 6, 2010. Pursuant to the Conversion, holders of Trust Units and holders of exchangeable shares of K-Bro Linen Systems Inc. will receive common shares of a newly-formed corporation (K-Bro Linen Inc.) on a one-for-one basis. Upon completion of the Conversion K-Bro Linen Inc. will indirectly own and operate the existing business of K-Bro and its subsidiaries, and the existing trustees of K-Bro will become the directors of K-Bro Linen Inc. Immediately following completion of the Conversion it is anticipated that K-Bro Linen Inc. will have approximately seven million common shares issued and outstanding.

Subject to receipt of all required Unitholder, TSX, Alberta Court of Queen's Bench and any other required third party approvals, K-Bro expects the Conversion will become effective January 1, 2011. The record date for the special meeting of Unitholders is November 1, 2010. A management information circular outlining the details of the Conversion will be mailed in early November to all Unitholders as of the record date in advance of the December 6, 2010 meeting date. To be implemented, the Conversion must be approved by not less than two-thirds of the votes cast by Unitholders at the special meeting.

K-Bro is proposing the Conversion as a result of certain changes in Canadian federal tax legislation specifically related to income trusts. While conversion to a corporation will not impact the underlying laundry and linen operations of K-Bro, it is expected to remove uncertainty for K-Bro that exists in the income trust marketplace today. K-Bro expects to continue trading on the Toronto Stock Exchange following the completion of the Conversion and intends to maintain its "KBL" ticker symbol.

K-Bro expects the Conversion will be completed on a tax-free rollover basis for Canadian income tax purposes. This information is not intended to be, and should not be construed as tax advice and investors should consult with financial advisors, legal counsel or accountants regarding the tax consequences of the exchange and any subsequent dividend payments received from K-Bro Linen Inc.

K-Bro intends that, following the conversion, K-Bro Linen Inc. will continue to pay dividends on a monthly basis. At this time, K-Bro anticipates that it will maintain the monthly dividend payment at the same rate of CDN$0.09167 per common share per month, however the actual amount of future dividends may vary depending upon production volumes, capital spending and costs and K-Bro cannot provide any assurances with regard to future dividend payments. K-Bro will utilize its available tax pools to mitigate its cash tax obligations and expects to incur cash taxes in Canada in the year following conversion.

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently has seven processing plants in six Canadian cities: Quebec City, Toronto, Edmonton, Calgary, Vancouver and Victoria.

Additional information regarding K-Bro including the 2009 Annual Information Form and other required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedar.com; the System for Electronic Document Analysis and Retrieval ("SEDAR").

FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking information and statements ("forward-looking information") within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "guidance", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "budget", "strategy" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information pertaining to the following: the conversion of K-Bro to a corporation and the timing and tax effects thereof; the payment and amounts of future dividends; the time at which Canadian income taxes may be paid; and the listing of the shares of K-Bro Linen Inc. on the Toronto Stock Exchange.

The forward-looking information contained in this news release reflects several material factors and expectations and assumptions of K-Bro including, without limitation: the receipt of all necessary Unitholder, Court, stock exchange and other third party approvals; the continuance of existing (and in certain circumstances, the implementation of proposed) tax regimes; and the availability of cash to pay dividends following the conversion from a trust to a corporation. K-Bro believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct.

The forward-looking information included in this news release is not a guarantee of future conditions or performance and should not be unduly relied upon. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: failure to receive all necessary Unitholder, Court, stock exchange and other third party approvals; changes in tax laws; acquisition and disposition activity that may affect the amount of tax pools and the time at which income taxes may be payable; insufficient cash to pay dividends; and certain other risks detailed from time to time in K-Bro's public disclosure documents.

The forward-looking information contained in this news release speak only as of the date of this news release, and none of K-Bro or its subsidiaries assumes any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.

For further information: Linda McCurdy, President & Chief Executive Officer, Chris Burrows, Vice-President & Chief Financial Officer, K-Bro Linen Income Fund, Phone: [phone], Email: [email protected], Web: www.k-brolinen.com