PRH Pearl River Holdings Limited

Prime Restaurants Royalty Income Fund (TSX:EAT.UN) (the "Fund") announced today
that the Fund has signed a definitive agreement (the "Combination Agreement")
with Prime Restaurants of Canada Inc. ("PRC"), PRC's sole shareholder, Prime
Restaurant Holdings Inc. ("PRH") and PRC Trademarks Inc. ("TradeMarkCo")
regarding the terms of a previously announced transaction (the "Combination
Transaction") to combine and form a new, publicly-traded corporation to be named
Prime Restaurants Inc. ("Amalco"). 


"The trustees unanimously recommend this transaction to the Fund's unitholders,"
said Steven Sharpe, Chairman of the board of trustees of the Fund. "The
combination of PRC, TradeMarkCo and the Fund will simplify the structure of the
combined business. In addition, the trustees believe that the interests of all
parties are best served by a corporate structure that provides greater
transparency, oversight of the operating business and access to financing. The
proposed combination will result in a corporate structure that provides enhanced
accountability to investors, and a more direct correlation between the
performance of the operating business and the results and prospects of the
public corporation. Under the proposed new structure, the current 'vend-in'
formula for new restaurant additions to the royalty pool will be eliminated and
the benefits of any growth in the Prime Restaurant system will accrue to all
investors. In conjunction with the previously announced operational
restructuring well under way at Prime, we believe the future is positive for the
combined businesses."


Under the existing structure, TradeMarkCo receives licensing royalties generated
by the restaurants franchised or owned by PRC (the "Prime Restaurants"). The
Combination Transaction will consolidate ownership of the intellectual property
for the Prime Restaurants (which is currently owned by TradeMarkCo) and the
franchising business currently operated by PRC. The conversion to a corporation
in conjunction with the Combination Transaction will also provide certainty to
the unitholders of the Fund ("Unitholders") with respect to the 2011 effective
date of tax legislation affecting income trusts and will simplify the structure
of the combined business.


Principal Terms of the Combination Transaction

The new entity, Amalco, will be the result of the combination of PRC and
TradeMarkCo. The Fund will be dissolved as part of the transaction and
Unitholders will receive shares in Amalco.


As previously announced, Amalco will have three classes of shares. Unitholders
will receive, for each unit of the Fund, one Class A Limited Voting share of
Amalco. For more information on the classes of shares of Amalco and PRH's
interest in Amalco immediately after the completion of the Combination
Transaction, refer to the Fund's press release dated February 16, 2010
announcing the agreement in principle and the Fund's information circular (the
"Information Circular") being prepared in connection with the Meeting (as
defined below).


The Combination Transaction will submitted for approval by the Fund's
Unitholders at the Fund's annual and special meeting of Unitholders (the
"Meeting"), currently scheduled to be held at Bier Markt restaurant, 58 The
Esplanade, Toronto, Ontario at 10:00 a.m. (Toronto time) on March 30, 2010. The
record date for determining Unitholders eligible to vote at the Meeting is
February 26, 2010. The Fund's Information Circular will include a summary of the
Combination Agreement and additional details concerning the Combination
Transaction. Unitholders should review the full text of the Combination
Agreement, which will be filed on SEDAR (www.SEDAR.com) for all terms and
conditions of the Combination Transaction. The Information Circular is expected
to be available on SEDAR on March 5, 2010 and the Fund expects to mail the
Information Circular to Unitholders in early March 2010.


Valuation and Fairness Opinion, Board Approval and Recommendation

The trustees of the Fund engaged Capital Canada Limited to prepare a formal
valuation of PRC and the Fund as well as a fairness opinion on the Combination
Transaction (the "Valuation and Fairness Opinion"). The Valuation and Fairness
Opinion states that, in the opinion of Capital Canada, as of February 25, 2010,
the fair market value range for the Fund is in the approximate range of $36.7
million to $42.7 million, the fair market value range for PRC is in the
approximate range of $12.4 million to $18.1 million and that the Combination
Transaction is fair, from a financial point of view, to the disinterested
Unitholders. A copy of the valuation and fairness opinion will be included as an
appendix to the Fund's Information Circular.


The Trustees, based upon their own investigations and deliberations, including
their consideration of the Valuation and Fairness Opinion, have unanimously
concluded that the Combination Transaction is fair to disinterested Unitholders
and is in the best interests of the Fund and its disinterested Unitholders, and
recommend that disinterested Unitholders vote in favour of the Combination
Transaction.


Approvals and Closing of the Transaction

The Combination Transaction will be effected by way of plan of arrangement under
the Business Corporations Act (Ontario). The Combination Transaction requires
(i) approval by the holders of at least 66 2/3% of the votes cast by Unitholders
present in person or by proxy at the Meeting, and (ii) "majority of the
minority" approval, excluding the votes of PRC, together with any parties
related to, and any person acting jointly or in concert with, PRC, including
John Rothschild. The completion of the Combination Transaction is also subject
to approval by the Ontario Superior Court of Justice, approval of the TSX for
the substitutional listing of the Class A Limited Voting shares to be issued
pursuant to the Combination Transaction and receipt of any necessary third party
consents. There can be no certainty, nor can the Fund provide any assurance,
that these conditions will be satisfied or, if satisfied, when they will be
satisfied. If these conditions are satisfied as anticipated, the Combination
Transaction is scheduled to close on or about April 5, 2010.


Distributions

In anticipation of the Combination Transaction, the Fund also announced today
that monthly distributions to Unitholders are expected to remain at $0.04 per
Unit effective until the distribution payable in March 2010 to Unitholders of
record on February 28, 2010. The distribution that would typically be paid in
April to Unitholders of record on March 31, 2010 will instead be paid as a
dividend by Amalco on or about April 15, 2010 to holders of Class A Limited
Voting Shares of Amalco of record on April 8, 2010.


If the Arrangement receives all necessary approvals and is implemented, it is
anticipated that Amalco will adopt a dividend policy to pay dividends on a
quarterly basis on the Class A Limited Voting Shares. It is currently
anticipated that the amount of such quarterly dividend will initially be $0.12
per Class A Limited Voting Share. The dividend policy will be subject to the
discretion of the board of directors of Amalco and may vary depending on, among
other things, Amalco's operating cash flow, financial requirements, restrictions
under future credit facilities, the satisfaction of solvency tests imposed by
the corporate legislation for the declaration of dividends and other conditions
existing at such future time. As a result, no assurance can be given as to
whether Amalco will pay dividends, or the frequency or amount of any such
dividend.


Advisors

As previous stated, the trustees of the Fund engaged Capital Canada Limited to
prepare a formal valuation of PRC and the Fund as well as a fairness opinion on
the Combination Transaction. TD Securities Inc. is acting as financial advisor
to the Special Committee of the board of directors of TradeMarkCo. National Bank
Financial Inc. is acting as financial advisor to PRC. Goodmans LLP is the legal
advisor to the Fund and the legal advisor to PRH and PRC is Stikeman Elliott
LLP.


About Prime Restaurants Royalty Income Fund

The Fund, through TradeMarkCo, is entitled to receive top-line royalties of
3.25% of the gross food and beverage revenue from pooled restaurants under the
terms of a 99-year licence agreement between TradeMarkCo and PRC.


About PRC and the Fund

PRC operates and franchises a diversified portfolio of leading brands of casual
dining restaurants and premium pubs in Canada. As a pioneer in the Canadian
casual dining industry since 1980, it is considered an important innovator in
the development of strong brands, and today has three core brands: East Side
Mario's, Casey's and Fionn MacCool's. PRC and its franchisees employ
approximately 12,000 people across the country.


The Fund is a limited purpose trust authorised to issue an unlimited number of
Trust Units and established to invest in TradeMarkCo. The source of revenue for
the Fund is through its ownership in, and debt instrument issued by,
TradeMarkCo. The Fund receives interest income on the TradeMarkCo Note which it
distributes to its Unitholders. TradeMarkCo owns certain trade-marks and
licenses their use to PRC which operates and franchises the restaurant and bar
business. In return, TradeMarkCo receives royalty income from the royalty pooled
restaurants operated and franchised by PRC. Additional information relating to
the Fund, including the Fund's financial statements, the Annual Information Form
of the Fund and PRC's MD&A and consolidated financial statements can be found at
www.sedar.com and the Fund's website at www.primeincomefund.ca


Forward-Looking Statements

The public communications of the Fund often include written or oral
forward-looking statements. Statements of this type are included in this news
release, and may be included in filings with Canadian securities regulators, or
in other communications. Forward-looking statements may involve, but are not
limited to, comments with respect to our objectives for 2010 and beyond, our,
PRC's and Amalco's strategies or planned future actions, our, PRC's and Amalco's
targets or expectations for our financial performance and condition, PRC's
ability to pay royalty payments and our ability to pay distributions or
dividends. All statements, other than statements of historical fact, contained
in this new release are forward-looking statements, including, without
limitation, statements regarding the future financial position and operations
(including estimated revenue from royalty pooled restaurants and the estimated
administrative and other operating expenses of the Fund), business strategy,
distributions, plans and objectives of or involving the Fund, PRC and Amalco.
Readers can identify many of these statements by looking for words such as
"believe", "expects", "will", "intends", "projects", "anticipates", "estimates",
"continues" and similar words or the negative thereof. Although management of
the Fund and PRC believe that the expectations represented in such
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct.


By their nature, forward-looking statements require us to make assumptions and
are subject to inherent risks and uncertainties including those discussed in the
Fund's MD&A and the Fund's annual information form dated March 11, 2009, (the
"AIF") under "Narrative Description of the Business - Risk Factors" which are
available at www.sedar.com. There is significant risk that predictions and other
forward-looking statements will not prove to be accurate. We caution readers of
this news release not to place undue reliance on our forward-looking statements
because a number of factors could cause actual future results, conditions,
actions or events to differ materially from the targets, expectations, estimates
or intentions expressed in the forward-looking statements.


Assumptions and analysis about the performance of the Fund, PRC and Amalco and
the markets in which they operate are considered in forecasting the Fund's,
PRC's and Amalco's expected financial results, PRC's ability to pay royalty
payments and the Fund's ability to pay distributions and in making related
forward-looking statements. The key assumption in respect of the Fund's level of
distributions is that the cumulative distributable cash will be able to support
the Fund's current level of distributions. The Fund receives the cash it
distributes from TradeMarkCo. TradeMarkCo receives all of the cash it pays to
the Fund through a royalty from PRC. Accordingly, the ability of the Fund to pay
its distributions depends on PRC's financial performance and ability to pay the
royalty. In respect of the ability to maintain and grow the royalty pooled
revenue and PRC's financial performance, key assumptions include those relating
to the demand for the goods and services under the Prime trademarks and in
respect of the Canadian markets in which the royalty pooled restaurants operate.
Should any of these factors or assumptions vary, actual results may differ
materially from the forward-looking statements.


The information set forth in the MD&A and AIF identifies factors that could
affect the operating results and performance of the Fund and PRC. We caution
that the list of factors discussed in the MD&A and the AIF is not exhaustive,
and that, when relying on forward-looking statements to make decisions with
respect to the Fund, investors and others should carefully consider the factors
discussed, as well as other uncertainties and potential events, and the inherent
risks and uncertainties of forward-looking statements.


The forward-looking statements contained herein are expressly qualified in their
entirety by this cautionary statement. The forward-looking statements included
in this news release are made as of the date of this news release. Except as
required by applicable securities laws, the Fund does not undertake to update
any forward-looking statement, whether written or oral, that it may make or that
may be made, from time to time, on its behalf.

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