The Second Cup Ltd. Announces Completed Conversion to a Corporation

TORONTO, Jan. 4 /CNW/ - The Second Cup Ltd. ("Second Cup") is pleased to announce that Second Cup Income Fund (the "Fund") has completed the previously announced plan of arrangement pursuant to which the Fund's income trust structure has been converted into a dividend paying publicly traded corporation named The Second Cup Ltd. The conversion of the Fund to a corporate structure was approved by an overwhelming majority of unitholders at the annual and special meeting of the unitholders of the Fund held on June 2, 2010. Under the plan of arrangement, unitholders of the Fund received, for each unit of the Fund held, one common share of Second Cup. The common shares of Second Cup will commence trading on the Toronto Stock Exchange on January 4, 2011 under the symbol "SCU".

Second Cup is expected to implement a dividend policy for 2011 whereby it will initially pay a quarterly dividend of $0.15 ($0.60 per annum) per common share. The first quarterly dividend is anticipated to be declared in respect of the quarter ended April 2, 2011 and it is expected to be paid on May 30, 2011 to shareholders of record at the close of business on May 16, 2011. The dividend policy was developed to continue to pay out a substantial portion of earnings while retaining a sufficient amount to adequately fund organic growth initiatives. The objective of the dividend policy post conversion will be to reflect a payout ratio of approximately 75% to 85% of net earnings per share, on a normalized basis.

About The Second Cup Ltd.

The Second Cup Ltd. trades on The Toronto Stock Exchange under the symbol SCU. The Second Cup Ltd. is Canada's largest franchisor of specialty coffee cafés, as measured by number of cafés, and offers the world's finest coffee through approximately 349 owner-operated cafés across the country. For more information on The Second Cup Ltd. please visit www.secondcup.com.

Forward Looking Information

Certain statements in this news release may constitute forward-looking statements. Forward-looking statements include words such as "may", "will", "should", "expect", "anticipate", "believe", "plan", "intend" and other similar words. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this release. These forward-looking statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not those results will be achieved. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Second Cup, or those of Second Cup cafés, or industry results to be materially different from any future results, performance or achievements expressed or implied by those forward-looking statements.

SOURCE Second Cup Income Fund

For further information: Robert Masson, Chief Financial Officer, (905) 362-1824 or investor@secondcup.com

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Second Cup Income Fund

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