Mr. Sean Morrison reports

DIVERSIFIED ROYALTY CORP. ANNOUNCES $52.5 MILLION BOUGHT DEAL OFFERING OF 6.00% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES

Diversified Royalty Corp. has entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets, National Bank Financial Inc. and Scotiabank pursuant to which the underwriters have agreed to purchase $52.5-million aggregate principal amount of 6.00 per cent convertible unsecured subordinated debentures at a price of $1,000 per debenture. In addition, the corporation has granted the underwriters an option to purchase up to an additional $7,875,000 aggregate principal amount of debentures at the offering price exercisable at any time up to 30 days following closing.

The debentures will mature June 30, 2027, and will bear interest at an annual rate of 6.00 per cent payable semi-annually in arrears on the last day of June and December in each year, commencing June 30, 2022. At the holder's option, the debentures may be converted into common shares of the corporation at any time prior to the close of business on the earlier of the last business day immediately preceding June 30, 2027, and the date fixed for redemption. The conversion price will be $4.05 per common share, subject to adjustment in certain circumstances.

The debentures will not be redeemable on or before June 30, 2025. After June 30, 2025, and prior to June 30, 2026, the debentures may be redeemed in whole or in part from time to time at Diversified Royalty's option, provided that the volume-weighted average trading price of the common shares on the Toronto Stock Exchange during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125 per cent of the conversion price. On or after June 30, 2026, and prior to the maturity date, Diversified Royalty may, at its option, redeem the debentures, in whole or in part, from time to time at par plus accrued and unpaid interest.

Diversified Royalty intends to redeem all of its outstanding convertible unsecured subordinated debentures due Dec. 31, 2022, prior to Dec. 31, 2022. The net proceeds of the offering, together with other funds, are expected to be used toward the redemption of the 2022 debentures.

Closing of the offering is expected to occur on or about March 30, 2022, and is subject to regulatory approval, including that of the TSX.

The debentures to be issued under the offering will be offered by way of a prospectus supplement to the corporation's short form base shelf prospectus dated May 11, 2021, in each of the provinces of Canada, except Quebec, and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended, and certain other jurisdictions.

About Diversified Royalty Corp.

Diversified Royalty is a multiroyalty corporation, engaged in the business of acquiring top-line royalties from well-managed multilocation businesses and franchisors in North America. Diversified Royalty's objective is to acquire predictable, growing royalty streams from a diverse group of multilocation businesses and franchisors.

Diversified Royalty currently owns the Mr. Lube, Air Miles, Sutton, Mr. Mikes, Nurse Next Door and Oxford Learning Centres trademarks. Mr. Lube is the leading quick lube service business in Canada, with locations across Canada. Air Miles is Canada's largest coalition loyalty program, with approximately two-thirds of Canadian households actively participating in the Air Miles program. Sutton is among the leading residential real estate brokerage franchisor businesses in Canada. Mr. Mikes currently operates casual steakhouse restaurants primarily in Western Canadian communities. Nurse Next Door is one of North America's fastest-growing home care providers with locations across Canada and the United States as well as in Australia. Oxford Learning Centres is one of Canada's leading franchised supplemental education services in Canada and the United States.

Diversified Royalty intends to increase cash flow per share by making accretive royalty purchases and through the growth of purchased royalties. Diversified Royalty expects to pay a predictable and stable dividend to shareholders and increase the dividend as cash flow per share increases allow.

We seek Safe Harbor.