LEGAL_1:24513533.1

Fifth Report of Duff & Phelps Canada

Restructuring Inc. as Court-

Appointed Receiver of Priszm

Income Fund, Priszm Canadian

Operating Trust, Priszm Inc., KIT

Finance Inc. and Priszm LP

March 6, 2013

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ContentsPage

1.0 Introduction..........................................................................................................1

1.1 Purposes of this Report............................................................................2

1.2 Currency ..................................................................................................3

2.0 Background .........................................................................................................3

3.0 The Property........................................................................................................4

3.1 Recommendation .....................................................................................5

3.2 Request for Confidentiality .......................................................................5

4.0 Conclusion and Recommendation .......................................................................6

Appendices

Receivership Order................................................................................................................... A

Sale Agreement (redacted)....................................................................................................... B

Confidential Appendices

Un-redacted copy of the Sale Agreement .................................................................................1

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Court File No.: CV-11-9375-00CL

ONTARIOSUPERIOR COURT OF JUSTICE

IN BANKRUPTCY AND INSOLVENCY(COMMERCIAL LIST)

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, PRUCO LIFE INSURANCECOMPANY AND PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY

-and-

PRISZM INCOME FUND, PRISZM CANADIAN OPERATING TRUST, PRISZM INC.,KIT FINANCE INC. AND PRISZM LP

FIFTH REPORT OF DUFF & PHELPS CANADA RESTRUCTURING INC.IN ITS CAPACITY AS COURT-APPOINTED RECEIVER

March 6, 2013

1.0 Introduction

1. Pursuant to an order of the Ontario Superior Court of Justice (Commercial List)(“Court”) made on March 31, 2011, as amended and restated pursuant to anorder of the Court made on April 29, 2011 (“CCAA Order”), Priszm Income Fund,Priszm Canadian Operating Trust, Priszm Inc., Kit Finance Inc. and Priszm LP(collectively, the “Company”) commenced proceedings (“CCAA Proceedings”)under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, asamended (“CCAA”). FTI Consulting Canada Inc. was appointed as the monitor(“Monitor”) in the CCAA Proceedings.

2. Pursuant to an order of the Court made on September 14, 2011 (“CCAATermination Order”), following the closing of the FMI Transaction (as definedbelow), the CCAA Proceedings were to be terminated.

3. Pursuant to an application of The Prudential Insurance Company of America,Pruco Life Insurance Company and Prudential Retirement Insurance and AnnuityCompany (collectively, “Prudential”), the Court made a further order onSeptember 14, 2011 (“Receivership Order”) which provided that following theclosing of the FMI Transaction, RSM Richter Inc. (“Richter”) was to be appointedas receiver (“Receiver”) of the assets, undertakings and properties of theCompany. The FMI Transaction closed on September 19, 2011.

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4. The termination of the CCAA Proceedings and the appointment of the Receiver(along with the commencement of the proceedings relating thereto(“Receivership Proceedings”)) became effective on September 21, 2011. A copyof the Receivership Order is attached as Appendix “A” to this Report.

5. Pursuant to a Court order made on December 12, 2011 (“Substitution Order”),Duff & Phelps Canada Restructuring Inc. (“D&P”) was substituted in place ofRichter as Receiver1 as a result of D&P’s acquisition of the Toronto restructuringpractice of Richter.

1.1 Purposes of this Report

1. The purposes of this report (“Report”) are to:

a) Advise the Court of an offer submitted by 9277-0445 Quebec Inc.(“Purchaser”)2 for the property located at 1580 Cure-Labelle Boulevard,Laval, Quebec (“Property”), and detail the terms of the offer and eventsleading to an agreement of purchase and sale (“Sale Agreement”)between the Purchaser and the Receiver, which is subject only to Courtapproval. A copy of the Sale Agreement, redacted to exclude thepurchase price and amount of deposit paid, is attached as Appendix “B”;and

b) Recommend that this Honourable Court issue an order:

Approving the sale of the Property to the Purchaser;

Authorizing and directing the Receiver to execute such documentsand take such additional steps as are necessary to complete thesale of the Property to the Purchaser;

Vesting in the Purchaser, as of closing, title to the Property, freeand clear of all liens, charges, security interests and otherencumbrances;

Sealing the Sale Agreement until the transaction has closed; and

Approving this Report and the Receiver’s activities set out in thisReport.

1On December 9, 2011, the assets used by Richter in its Toronto restructuring practice were acquired by D&P.

Pursuant to the Substitution Order, D&P was substituted in place of Richter in certain ongoing mandates,including acting as Receiver in these proceedings. The licensed trustees/restructuring professionals overseeingthis mandate prior to December 9, 2011 remain unchanged.2

The offer was originally submitted by Investissements Amir S.E.C or Joseph Eid and was subsequentlyassigned to another of the prospective purchaser’s companies, 9277-0445 Quebec Inc.

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1.2 Currency

1. Unless otherwise noted, all currency references in this Report are to Canadiandollars.

2.0 Background

1. The Company was a franchisee of Yum! Restaurants International (Canada) LP.

2. At the time the CCAA Order was made, the Company was the largest operator ofKFC franchises in Canada.

3. In addition to operating KFC franchises, the Company operated a limited numberof multi-branded restaurants that combined a KFC restaurant with either a TacoBell or Pizza Hut restaurant.

4. During the CCAA Proceedings, the Company completed the sale of the majorityof its locations in British Columbia and Ontario to Soul Foods Canada Inc. (“SoulTransaction”) and the majority of its locations in Nova Scotia and New Brunswickto FMI Atlantic Inc. (“FMI Transaction”). Stores in these provinces that wereexcluded from the Soul Transaction and FMI Transaction have been closed.

5. On May 28, 2012, the Receiver completed the sale of the majority of theCompany’s locations in Alberta and Manitoba to Hi-Flyer Foods (Canada) Inc.(“HFFI Transaction”). Stores in these provinces that were excluded from theHFFI Transaction were closed.

6. On September 17, 2012, the Receiver completed the sale of the majority of theCompany’s locations in Quebec to Olympus Food (Canada) Inc. (“OlympusTransaction”). Stores in this province that were excluded from the OlympusTransaction were closed.

7. All of the Company’s operating restaurants have now been sold or closed asdescribed above. The Receiver has assigned or is in the process of assigningthe leases relating to such restaurants and has disclaimed the leases relating tothose restaurant locations that have closed. In addition, the Receiver hasdisclaimed the Company’s head office lease and warehouse leases.Accordingly, the Property is the only asset remaining to be realized upon.

8. Additional information concerning the Company and these proceedings isprovided in the application materials filed in the Receivership Proceedings and inthe CCAA Proceedings, including:

the affidavit of Paul Procyk, a Vice-President of Prudential InvestmentManagement, Inc. sworn September 9, 2011;

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the Receiver’s reports to Court, which are available on the Receiver’swebsite at www.duffandphelps.com/restructuringcases; and

the affidavits, motion materials and reports filed by the Monitor in theCCAA Proceedings, which are available on the Monitor’s website athttp://cfcanada.fticonsulting.com/priszm/.

3.0 The Property

1. On December 3, 2012, the Receiver entered into a listing agreement with AvisonYoung Quebec Inc. (“Avison Young”) to list the Property for sale at $535,000(“Listing Price”).

2. Prior to entering into an agreement with Avison Young, the Receiver requestedproposals from Avison Young and one other real estate broker. In addition toproviding relevant comparative sales and listing information, the proposalprovided by Avison Young also set out a more comprehensive strategy for themarketing and sale of the Property. Accordingly, the Receiver elected to engageAvison Young. Prudential consented to the retention of Avison Young.

3. The Property was listed for sale immediately after Avison Young’s retention.

4. On December 17, 2012, an offer was received for the Property at a price belowthe Listing Price. Given the time of year (the holiday season) negotiations stalleduntil early January, 2013. On January 9, 2013, a revised offer was received fromthe same party; however, the purchase price was not increased.

5. On January 9, 2013, an offer was received from another party (being thePurchaser).

6. On January 14, 2013, a third offer was received.

7. With three offers in hand, the interested parties were asked to re-submit theiroffers by noon on January 16, 2013.

8. All three parties submitted revised offers by the offer deadline. The Purchaser’soffer was the highest and least conditional offer. The Purchaser’s conditionshave now been waived, except for Court approval.

9. Upon acceptance of the Sale Agreement, a deposit of approximately 10% waspaid to the Receiver’s counsel in trust.

10. The proposed transaction is now subject only to Court approval, contemplates aclosing within 15 days of Court approval and is consistent with standardinsolvency transactions (no representations and warranties of significance).

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3.1 Recommendation

1. For the following reasons, the Receiver recommends that the Court issue anorder approving the transaction and vesting clean title to the Property in thePurchaser:

The Property was marketed by a professional real estate firm usingtraditional methods for selling real estate;

Avison Young is familiar with the local real estate market;

Avison Young is of the view that the purchase price is reasonable andthat the purchase price is consistent with current market values;

Upon completion of the transaction, the estate will cease fundingoccupancy costs for the Property, such as utilities, insurance, property taxand security;

The offer is only conditional upon Court approval;

The offer is the highest and best offer received;

The selling price is consistent with comparable transactions; and

Prudential, being the only stakeholder with an economic interest, supportsthe transaction.

3.2 Request for Confidentiality

1. The Sale Agreement has been redacted to exclude the purchase price and theamount of the deposit paid. The Receiver respectfully requests that thisdocument be filed with the Court on a confidential basis until such time that thesale transaction closes, as it is the Receiver’s view that the availability of thisinformation may negatively impact future realizations on the sale of the Propertyin the event that the transaction does not close. A copy of the un-redacted SaleAgreement is attached as Confidential Appendix “1”. The Receiver also requeststhat upon closing the Transaction, the sealing order be automatically terminated.

2. The Receiver believes that no stakeholder will be prejudiced if the information issealed until the transaction has closed.

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4.0 Conclusion and Recommendation

1. Based on the foregoing, the Receiver respectfully recommends that thisHonourable Court make an order granting the relief detailed in Section 1.1 (b).

* * *

All of which is respectfully submitted,

DUFF & PHELPS CANADA RESTRUCTURING INC.IN ITS CAPACITY AS COURT-APPOINTED RECEIVER OFPRISZM INCOME FUND, PRISZM CANADIAN OPERATING TRUST,PRISZM INC., KIT FINANCE INC. AND PRISZM LPAND NOT IN ITS PERSONAL CAPACITY

Appendix “A”

Appendix “B”