XS Cargo Income Fund: News Release

XS Cargo Income Fund (the "Fund" or "XS Cargo") (TSX VENTURE:XSC.UN) is pleased
to announce that it has entered into a definitive agreement with XSC Canada
Holdings, Inc. ("Holdings"), an entity formed by KarpReilly LLC, whereby XS
Cargo has agreed to sell to Holdings all of its 51% interest in its two
operating subsidiaries, XS Cargo Limited Partnership and XS Cargo GP Inc.
(collectively, the "Operating Entities"), for cash consideration of $5,332,019
(the "Purchase Price"), following which the Fund will be wound-up and the
Purchase Price will be distributed to unitholders of the Fund on a pro rata
basis after the payment of all transaction and wind-up related costs and
expenses (the "Transaction"). After the payment of such costs and expenses, and
on a fully diluted basis, it is currently estimated that unitholders will
receive a minimum of $0.70 to a maximum of $0.75 for each unit of the Fund held
upon wind-up of the Fund.


The Transaction will be completed pursuant to a plan of arrangement under the
Business Corporations Act (Alberta) and is subject to customary conditions for
transactions of this nature, including the receipt of all required court and
regulatory approvals, and the approval of at least two-thirds and a majority of
the minority of the unitholders who vote at a special meeting of unitholders to
be held in late May 2011 for the purpose of considering and approving the
Transaction. Closing of the Transaction is anticipated to occur in June 2011,
with the wind-up of the Fund and the redemption of the Fund's units expected to
occur as soon as practicable thereafter.


It is also a condition to completion of the Transaction that concurrent
therewith, Famous Brands (Edmonton) Inc. ("Famous Brands"), a company controlled
by Mike McKenna, a trustee and the President and Chief Executive Officer of XS
Cargo, sell to Holdings the remaining 49% equity interest in the Operating
Entities that it holds, and Famous Brands and Mr. McKenna have entered into an
agreement to do so based on the same equity valuation as that of the 51%
interest of the Fund, except that a portion of the consideration would be paid
to Famous Brands upon the achievement of certain earnings performance
thresholds.


The Fund will set a record date for a special meeting of unitholders to approve
the terms of the Transaction and will mail a circular describing the proposed
Transaction to Fund unitholders in late April 2011.


The Board of Trustees of the Fund established a Special Committee of independent
trustees with a mandate to, among other things, consider the Transaction and to
make a recommendation to the Board of Trustees in respect thereof. The Special
Committee recommended that the Board of Trustees approve the Transaction, and
the Board of Trustees has unanimously approved the Transaction, has concluded
that the Transaction is in the best interests of the Fund and its unitholders,
and has unanimously resolved to recommend that unitholders vote their units in
favour of the Transaction. The trustees and officers of the Fund, who
collectively hold 51% of the outstanding units and special voting units of the
Fund, have also entered into voting agreements pursuant to which, among other
things, they have agreed to support and vote in favour of the Transaction.


Business of the Fund

The Fund is an unincorporated open-ended trust created to invest in the
broadline closeout retail business through an indirect controlling interest of
XS Cargo Limited Partnership which through its general partner, XS Cargo G.P.
Inc., operates 42 closeout retail stores in Alberta, British Columbia, Manitoba,
Saskatchewan, Ontario, Newfoundland, Nova Scotia and New Brunswick.


About KarpReilly, LLC

KarpReilly, LLC is a private investment firm, whose primary mission is to
partner with premier small to mid-size growth companies and help them achieve
their long-term vision. KarpReilly currently manages funds and affiliates with
initial capital commitments totaling $310 million. Over the past 15 years, the
principals of KarpReilly have invested in, sat on the boards of and nurtured
over 25 consumer growth companies. Among the notable discount and closeout
retail companies that the principals of KarpReilly have invested in are Dollar
Tree Stores, Ollie's Bargain Outlet, and Bob's Discount Furniture among others.
For more information, please visit www.karpreilly.com.


Forward-Looking Statements

This press release contains forward-looking statements and information
concerning the anticipated completion of the proposed Transaction and the
anticipated timing for completion of the Transaction. XS Cargo has provided
these anticipated times in reliance on certain assumptions that they believe are
reasonable at this time, including assumptions as to the time required to
prepare meeting materials for mailing, the timing of receipt of the necessary
regulatory and court approvals and the time necessary to satisfy the conditions
to the closing of the Transaction. These dates may change for a number of
reasons, including unforeseen delays in preparing meeting materials, inability
to secure necessary regulatory or court approvals in the time assumed or the
need for additional time to satisfy the conditions to the completion of the
Transaction. Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this press release
concerning these times. Readers are cautioned that the foregoing list of factors
is not exhaustive. The forward-looking statements and information contained in
this press release are made as of the date hereof and the Fund does not
undertake any obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.