Swiss Water Decaffeinated Coffee Income Fund Announces Intention to Convert
to a Corporation

TRADING SYMBOL: The Toronto Stock Exchange - SWS.UN

VANCOUVER, Sept. 30 /CNW/ - Swiss Water Decaffeinated Coffee Income Fund ("the Fund") today announced that it has entered into an arrangement agreement with its wholly owned subsidiary, Swiss Water Decaffeinated Coffee Company Inc. ("SWDCC"), in order to effect a conversion of the Fund to a corporation. The Fund will be asking its unitholders to approve the conversion at a special meeting of unitholders expected to be held on December 9, 2010.

The conversion is to take place as a "plan of arrangement" and is expected to be effective January 1, 2011. Under the arrangement, unitholders of the Fund are to receive one common share of a newly formed corporation for each unit of the Fund held at the time of the conversion. It is expected that unitholders resident in Canada will generally receive their shares on a tax-deferred basis.

The newly formed corporation, which is expected to be listed on the Toronto Stock Exchange once the plan of arrangement becomes effective, will be known as Ten Peaks Coffee Company Inc. ("Ten Peaks"). The SWISS WATER(R) Process decaffeination business will continue to be conducted by SWDCC under its current name, with all of SWDCC's interests owned directly by Ten Peaks. Additionally, it is expected that the current trustees of the Fund will become the directors of Ten Peaks, and the current officers and management of SWDCC will become officers and management of Ten Peaks.

The new name for the publicly held corporation reflects management's intention to continue enhancing and growing the Fund's current business, while possibly expanding into other related businesses in future.

"Since SWDCC's inception in 2000, our team has acquired significant expertise and a leading position in the specialty coffee industry," said Frank Dennis, President and CEO of SWDCC and a Trustee of the Fund. "Our proprietary Swiss Water(R) Process enjoys a strong brand identity and wide recognition among health-conscious consumers. Looking ahead, we intend to build on our knowledge base to develop new related markets that will complement those we have established for our chemical free decaffeinated coffees. We believe today's announced changes to our corporate structure and to our name will leave us better positioned to pursue these growth opportunities when appropriate."

The Fund also announced that it will continue with its current cash distributions to unitholders for the balance of 2010. If the plan of arrangement is approved by unitholders, Ten Peaks is expected to pay an initial quarterly dividend to shareholders of $0.0625 ($0.25 per annum) per share, beginning with a dividend for the quarter ended March 31, 2011. Depending on their tax bracket, this level of dividends should provide most investors with an attractive after-tax return, similar to what they currently receive in distributions from the Fund. The dividend policy of Ten Peaks will be subject to the discretion of the board of directors, who will review the level of dividends periodically on the basis of a number of factors including Ten Peaks' financial performance, future prospects and the capital requirements of the business.

The conversion to a corporation is a result of the changes to the taxation of income funds which become effective January 1, 2011, and which make the income fund form of business enterprise less advantageous.

The conversion will require the approval of at least two-thirds of the votes cast by unitholders present in person or by proxy at the special meeting, as well as court and regulatory approval. Further details of the proposed conversion will be set out in an information circular of the Fund, expected to be sent to unitholders in early November 2010.

Company Profile

The Fund owns Swiss Water Decaffeinated Coffee Company Inc. (SWDCC), a premium green coffee decaffeinator located in Burnaby, British Columbia, Canada. SWDCC decaffeinates customer-owned coffees, including organically certified coffees, for a fee - its "toll" business; and also purchases high-quality green coffees, decaffeinates them and markets them to the green coffee trade - its "non-toll" business. The SWISS WATER(R) Process is a proprietary 100% chemical free decaffeination process that does not use methylene chloride or ethyl acetate. The SWISS WATER(R) Process is the world's only consumer branded decaffeination process and the company supports the brand through ongoing consumer research and focused consumer advertising.

Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements may include such words as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance as well as management's current estimates, but which are based on numerous assumptions and may prove to be incorrect. In particular, this news release contains forward-looking information and statements relating to the expectations of the Fund regarding the proposed conversion including, but not limited to: timing, completion, receipt of necessary approvals and anticipated benefits of the conversion.

These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties, including, but not limited to, risks related to processing volumes and sales growth, operating results, supply of coffee, general industry conditions, commodity price risks, technology, competition, foreign exchange rates, and general economic conditions.

The forward-looking statements and financial outlook information contained herein are made as of the date of this press release and are expressly qualified in their entirety by this cautionary statement. Except to the extent required by applicable securities law, the Fund undertakes no obligation to publicly update or revise any such statements to reflect any change in management's expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those described herein.

%SEDAR: 00017658E

For further information: Sherry Tryssenaar, Chief Financial Officer, Swiss Water Decaffeinated Coffee Company Inc., Phone: [phone], Fax: [phone], Email: [email protected], Website: www.swisswater.com