The Fund earns equity income from its investment in the Partnership and interest income on a $30 million loan to Pizza Pizza Limited (the “PPL Loan”). The Fund’s equity income from the Partnership is calculated as the royalty income less the Partnership’s operating expenses less earnings attributable to Pizza Pizza.

The Fund’s interest income on the PPL Loan is calculated at 6% per annum, payable monthly. The Fund, indirectly through the Partnership, earns royalty income equal to 6% of the Royalty Pool system sales of the Pizza Pizza restaurants.

The Partnership’s operating expenses include administrative expenses, deferred financing fees and interest paid on a $47 million bank term loan.

Pizza Pizza’s interest in the earnings of the Partnership is from its ownership in Class B and Class C Partnership units. Subject to the Subordination Agreement, each Class B Unit can be exchanged indirectly for that number of units equal to the Class B Exchange Multiplier as defined in the Licence and Royalty Agreement applicable at the date of the exchange. Class C Units can be exchanged by requiring the Trust to purchase those Class C Units in consideration of the assumption by the Trust of an amount of the indebtedness under the PPL Loan equal to $10.00 per Class C Unit to be transferred.