Spinrite Income Fund

Spinrite Income Fund

October 22, 2007 17:20 ET

Spinrite Income Fund Announces the Filing of the Notice of Special Meeting and Management Information Circular Following the Expiry of the Go-Shop Period Without Receipt of a Superior Proposal

TORONTO, ONTARIO--(Marketwire - Oct. 22, 2007) - Spinrite Income Fund (TSX:SNF.UN) (the "Fund") announced today that it has filed with the Canadian securities regulatory authorities a notice of special meeting and management information circular in connection with the previously announced special meeting of its unitholders. At the special meeting, unitholders will be asked to consider and, if thought appropriate, approve a special resolution authorizing: (a) the sale of substantially all of the assets of the Fund to Spinrite Acquisition Corp. ("SAC"), a company indirectly controlled by entities managed by Sentinel Capital Partners, L.L.C., on the terms and conditions set forth in the acquisition agreement dated as of September 4, 2007 by and between the Fund and SAC (the "Acquisition Agreement"); and (b) amendments to the Amended and Restated Declaration of Trust of the Fund to, among other things, provide for the redemption of units by the Fund for cash consideration equal to $2.25 per unit and allow for the termination of the Fund by its trustees.

The Fund also announced that the "go-shop" period, during which the Fund was entitled to solicit competing proposals to the acquisition of the Fund by Sentinel, expired on October 19, 2007 without the emergence of a superior proposal and that the board of trustees of the Fund unanimously confirmed its recommendation that unitholders vote in favour of the proposed transaction with Sentinel.

The special meeting of unitholders will be held at 11:00 a.m. (Toronto Time) on November 14, 2007 at 79 Wellington Street West, 33rd Floor, Toronto, Ontario. Unitholders as at the close of business on October 19, 2007, the record date for the special meeting, are being sent the meeting materials and will be entitled to vote at the special meeting.

The management information circular contains, among other things, the unanimous recommendation of the board of trustees of the Fund that unitholders vote in favour of the proposed transaction. The management information circular also contains information concerning the process leading up to the execution and delivery of the Acquisition Agreement with SAC, the reasons for the special committee's recommendation to the board of trustees that unitholders vote in favour of the proposed transaction, the redemption of the Fund's outstanding units and the termination of the Fund.

Unitholders are urged to carefully read the management information circular. Unitholders of the Fund may obtain a copy of the management information circular (when available) on the SEDAR website at www.sedar.com. The management information circular is expected to be mailed to unitholders of the Fund in accordance with applicable securities laws before October 24, 2007.

Assuming unitholders approve the special resolution, the transaction with SAC is scheduled to close on or about November 16, 2007.

About Spinrite Income Fund

Spinrite Income Fund is the largest producer and marketer of craft yarn in Canada and one of the largest in the United States. Established in 1952, Spinrite researches, develops, manufactures and markets a broad variety of consumer craft yarns. The company also supports its market with patterns that provide customers with creative ideas for knitted products. Spinrite has approximately 450 employees at its fully integrated manufacturing and distribution centre in Listowel, Ontario.

Forward-Looking Statements

This press release may contain forward-looking statements relating to expected future events and financial and operating results of the Fund that involve risks and uncertainties. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed from time to time in the Fund's annual information form filed with the Canadian securities regulatory authorities. Due to the potential impact of these factors, the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by
applicable law.

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