Pizza Pizza Acquires Pizza 73

Pizza Pizza Royalty Income Fund and Pizza Pizza Limited completed the acquisition of Flying Pizza 73 Inc. and its affiliated companies on July 24, 2007. In connection with the transaction, the Fund has acquired the trade-marks and other intellectual property associated with Pizza 73 restaurant operations. The acquisition of Pizza 73, a leading quick-service restaurant pizza retailer based in Edmonton, allows Pizza Pizza to expand into Western Canada. Pizza Pizza operates 532 restaurant locations, predominantly in Ontario and Quebec.

The Fund and Pizza Pizza acquired Pizza 73 for a combined purchase price of $70.25 million. The Fund, through Pizza Pizza Royalty Limited Partnership, acquired the trade-marks and other intellectual property of Pizza 73 for $54.04 million and Pizza Pizza acquired the operating business of Pizza 73 for $16.21 million.

In connection with the transaction, on July 5, 2007 the Fund issued 2,600,000 subscription receipts, each representing the right to receive one unit of the Fund, for gross proceeds of $23.8 million. The proceeds of the offering were applied to satisfy part of the purchase price payable by the partnership.

Concurrent with the closing of the transaction, the partnership entered into a credit facility co-led by BMO Bank of Montreal and Toronto-Dominion Bank to finance a portion of the purchase price payable in the transaction and to re-finance existing indebtedness. In addition, Michael Overs, indirectly, and the Pizza 73 vendors acquired an aggregate of 766,392 units on a private placement basis, for total proceeds to the Fund of approximately $7 million.

Torys LLP represented Pizza Pizza Royalty Income Fund and Pizza Pizza Limited in the acquisition, private placement and offering, working with Dan Vukovich, general counsel, Pizza Pizza Limited. Torys' team included James Scarlett, Glen Johnson, Wendy Kennish, Peter Bryce, David Ho, Stephen Jaggers and Mary Thomas-Nagel (corporate and securities); Corrado Cardarelli and Richard Johnson (tax); Amanda Balasubramanian, Natasha De Cicco and Jennifer Manning (lending); Eric Boehm and Joanne Nardi (intellectual property); Tara Sastri (pension and employment); and Katharine Alexander-Carew (real estate).

The independent trustees of Pizza Pizza Royalty Income Fund were represented by Goodmans LLP with a team that included Steve Halperin and Tim Heeney (corporate) and Jon Northup (tax).

Pizza 73 was represented by Parlee McLaws LLP with a team that included David Tam, Jim Thomson, Cynthia Solano (corporate and securities); David Kozicki, Sarah Manduca, Megan Buffin (corporate); Jay Haugan (intellectual property); Colleen Verville (employment); and Katherine MacRae (tax).

The underwriters for the subscription receipt offering led by Toronto-Dominion Bank and the lenders for the credit facility co-led by BMO Bank of Montreal and Toronto-Dominion Bank were represented by Osler, Hoskin & Harcourt LLP with a team that included Chris Murray, Jeff Murray, Jennifer Lee (corporate and securities); Jack Silverson (tax); and Laurie Barrett, Lida Bucyk and Charles Zienius (lending).