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The Keg Royalties Income Fund and Keg Restaurants Ltd. Announce Completion of the Sale of a 51% Interest in Keg Restaurants Ltd.

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 02/04/14 -- The Keg Royalties Income Fund (the "Fund") (TSX: KEG.UN) and Keg Restaurants Ltd. ("KRL") today announced that Fairfax Financial Holdings Limited ("Fairfax") has completed the transaction to acquire a 51% interest in KRL from David Aisenstat. Mr. Aisenstat will continue to hold the remaining 49% interest in KRL and he, along with the rest of the current KRL management team, will remain in operational control of The Keg.

The Fund is a limited purpose, open-ended trust established under the laws of the Province of Ontario that, through The Keg Rights Limited Partnership (the "Partnership"), a subsidiary of the Fund, owns certain trademarks and other related intellectual property used by KRL. In exchange for use of those trademarks, KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool.

With approximately 9,500 employees, over 100 restaurants and system sales of approximately $500 million, Vancouver-based KRL is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. KRL has been named one of the "50 Best Employers in Canada" by Aon Hewitt for the past twelve years.

KRL currently holds 905,944 Class A Units ("Class A Units"), 176,700 Class B Units ("Class B Units"), 5,700,000 Class C Units and 2,192,944 Class D Units ("Class D Units") of the Partnership. The Class A Units, the Class B Units and the Class D Units (collectively, the "Exchangeable Units") are exchangeable on a one-for-one basis into units of the Fund ("Fund Units").

Assuming all the Exchangeable Units were exchanged for Fund Units, they would currently represent approximately 22.4% of the Fund Units.

Fairfax has acquired the Shares for investment purposes. Fairfax currently has no intention of acquiring Fund Units. KRL is entitled to receive additional Exchangeable Units in accordance with contractual arrangements between KRL and the Partnership.

The Early Warning Report filed by Fairfax in connection with this transaction can be obtained by contacting John Varnell at (416) 367-4941. Fairfax's registered and head office is located at 95 Wellington Street West, Suite 800, Toronto, Ontario M5J 2N7.

This press release may contain certain "forward looking" statements reflecting The Keg Royalties Income Fund's current expectations in the casual dining segment of the restaurant food industry. Investors are cautioned that all forward looking statements involve risks and uncertainties, including those relating to the Keg's ability to continue to realize historical same store sales growth, changes in market and existing competition, new competitive developments, tax legislation, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund's financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada.

The Trustees of the Fund have approved the contents of this press release.

The Keg Royalties Income Fund
Neil Maclean
Chief Financial Officer
(604) 821-6416

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