TERRAVEST INCOME FUND
TSX : TI.UN

TERRAVEST INCOME FUND

September 17, 2007 07:00 ET

TerraVest Income Fund Announces Organizational Changes

EDMONTON, ALBERTA--(Marketwire - Sept. 17, 2007) - TerraVest Income Fund (TSX:TI.UN) announced today that it will internalize the management functions currently provided by TerraVest Management Partnership (the "Manager") under the Management Services Agreement dated July 9, 2004 (the "Management Agreement") among the Fund, TerraVest Industries Inc. and the Manager. Accordingly, the Fund has given notice of termination of the Management Agreement effective January 16, 2008 ("Termination Date") in accordance with the terms thereof. The Fund, TerraVest Industries Inc. and the Manager have agreed that the Manager is relieved of its obligations to perform services to the Fund and TerraVest Industries Inc. under the Management Agreement effective as of September 16, 2007.

The Fund also announces the appointment of Raffi Sethian as Executive Vice President and Chief Operating Officer of TerraVest Industries effective September 17, 2007. Mr. Sethian will be responsible for assisting in the strategic leadership of the Fund and strengthening and developing the portfolio businesses, in particular the non-energy businesses.

The Fund also announces that Paul Casey, C.A. is appointed Chief Financial Officer of TerraVest Industries effective September 17, 2007. Mr. Casey was previously the Vice President and Controller of TerraVest Industries and has been employed in financial roles with the Fund and its predecessor for nine years.

Thomas S. Kileen and Timothy W. Zosel, whom the Manager made available under the terms of the Management Agreement to perform the duties of, respectively, Chief Financial Officer and Senior Vice President of the Fund and TerraVest Industries have resigned from those positions effective September 16, 2007. Mr. Kileen and Mr. Zosel have agreed to continue as Trustees of the Fund and Directors of TerraVest Industries until the Termination Date.

Dale H. Laniuk, whom the Manager had also made available to perform the duties of Chief Executive Officer of TerraVest Industries, will continue to serve in that capacity, and will continue to serve as a Trustee of the Fund and as a Director of TerraVest Industries. Mr. Laniuk stated, "We look forward to the operational efficiencies for the Fund that are expected to result from the internalization."

In accordance with the terms of the Management Agreement, the Fund will pay the Manager a Termination Fee of $1,600,000 on or before January 19, 2008; provided that the Termination Fee shall not exceed 3% of the Fund's fully diluted weighted average market capitalization during the 20 trading day period ending on January 15, 2008. In accordance with the terms of the Management Agreement, the Fund may pay up to one quarter of the Termination Fee by issuing Units of the Fund valued at the weighted average trading price of the Units for the 20 trading days ending on January 15, 2008. The Fund will continue to pay the Manager the base fee and certain expenses under the Management Agreement until the Termination Date.

TerraVest Income Fund is an income trust whose Units trade on the Toronto Stock Exchange. Its mandate is to invest in a diversified group of income producing businesses to provide its Unitholders with stable and increasing cash returns. TerraVest has made six investments:

- RJV is one of the largest providers of wellhead processing equipment for the natural gas industry in western Canada.

- Stylus is one of Canada's leading made-to-order upholstered furniture manufactures.

- Don Park is one of Canada's largest manufacturers and suppliers of heating, ventilation and air conditions (HVAC) products.

- Diamond is a market leader in providing well servicing to the oil and natural gas sector in south-western Saskatchewan, with a growing presence in Alberta.

- Beco is one of Canada's largest designers, manufacturers and importers of home textile products.

- Ezee-On manufactures heavy-duty equipment for large acreage grain farms and livestock operations.

Visit us at: www.terravestincomefund.com

Forward-Looking Information

This press release contains forward-looking statements, such as the expected benefits to be realized by the Fund as a result of the internalization of management. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, the anticipated and unanticipated costs associated with management internalization and the ongoing operations of the Fund and its underlying businesses. While the Fund anticipates that subsequent events and developments may cause its views to change, it specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Fund's views as of any date subsequent to the date of this press release. Readers should not place undue reliance on forward-looking statements.

Contact Information