SIR CORP. ANNOUNCES CREDIT AGREEMENT WITH NEW SENIOR LENDERS

Canada NewsWire

BURLINGTON, ON, May 15, 2025

BURLINGTON, ON, May 15, 2025 /CNW/ - SIR Corp. ("SIR"), which has several agreements and interests related to SIR Royalty Income Fund (the "Fund") (TSX: SRV.UN), announced today that it has entered into a credit agreement (the "Credit Agreement") with new senior lenders to refinance its current credit facility. A copy of the Credit Agreement will be filed on SEDAR+ under the Fund's profile.

The Credit Agreement between SIR and Bank of Montreal as Sole Lead Arranger and Administrative Agent and a syndicate of one additional Schedule I Canadian chartered bank (together, the "Lenders") is a three-year facility for a maximum principal amount of $68.0 million, consisting of: i) a $5.0 million revolving term credit facility (the "Operating Facility"), ii) a $38.0 million revolving term loan (the "Term Facility"), and iii) a $25.0 million delayed draw term credit facility (the "Delayed Draw Facility"). The maturity date of the three facilities is May 15, 2028.

"This new credit agreement provides us with greater financial capacity and flexibility to advance our growth objectives, including the expansion of our successful Scaddabush brand and continuing to update and grow our well-established Jack Astor's brand," said Peter Fowler, CEO of SIR Corp. "We are pleased to partner with lenders that support our growth strategy."

The Operating Facility is for general corporate and operating purposes, with the principal to be repaid on the maturity date. The Term Facility was fully drawn at closing and is being used to refinance SIR's existing senior debt. The initial advance on the Term Facility is repayable in quarterly instalments of $0.8 million, with the remaining outstanding principal balance due on the maturity date. Following the initial advance, subsequent advances may be requested (subject to availability) in minimum multiples of $1.0 million to finance capital spending on restaurant renovations pursuant to SIR's annual business plan. Each subsequent advance is repayable in equal quarterly instalments based on a 12-year amortization, with the remaining outstanding principal balance due on the maturity date. Advances on the Delayed Draw Facility are interest-only for the first 12 months and shall amortize quarterly thereafter beginning the first full quarter after the 12-month period with amortization of 11 years and the remaining balance due on the maturity date. Advances on the Delayed Draw Facility may be requested (subject to availability) in minimum multiples of $0.25 million to finance capital spending on new restaurants pursuant to SIR's annual business plan. $0.9 million is currently drawn on the Delayed Draw Facility. A standby fee will be charged on the undrawn balance of all three facilities.

As part of the Credit Agreement, certain financial covenants apply to SIR, including a minimum fixed charge coverage ratio and maximum senior leverage ratio. The facilities are secured by substantially all the assets of SIR and most of its subsidiaries, which are also guarantors. The SIR Royalty Limited Partnership (the "Partnership") and the Fund have not guaranteed the Credit Agreement.

The Credit Agreement qualifies as "permitted indebtedness" within the meaning of the agreements between the Fund, the Partnership and SIR, and as a result, the Fund and the Partnership have, as contemplated in the existing agreements, subordinated and postponed their claims against SIR to the claims of the Lenders. This includes a subordination of the Partnership's rights under the License and Royalty Agreement between the Partnership and SIR, whereby the Partnership licenses to SIR the right to use trademarks and related intellectual property in return for royalty payments based on revenues and is effected pursuant to the terms of the Intercreditor Agreement. A copy of the Intercreditor Agreement will also be filed on SEDAR+ under the Fund's profile.

While the Credit Agreement has a significantly higher amount of credit available than SIR's previous loan facilities, the interest rates and scheduled principal repayments are significantly lower. SIR believes and has advised the Fund that it expects to be able to comply with the covenants under the new debt and service the new debt, as well as meet its other obligations. However, there can be no assurance of this. If SIR were to be unable to do so, this could have material adverse consequences on SIR and the Fund, and SIR in such circumstances would seek to cooperate with the Fund to protect stakeholder interests.

About SIR Corp.

SIR Corp. ("SIR") is a privately held Canadian corporation that owns a portfolio of 53 restaurants in Canada. SIR's Concept brands include Jack Astor's Bar and Grill$(R)$ with 35 locations, and Scaddabush Italian Kitchen & Bar(R) with 13 locations. SIR also operates one-of-a-kind "Signature" brands including The Loose Moose(R) , Reds(R) Square One and Edna + Vita$(TM)$ . All trademarks related to the Concept and Signature brands noted above are used by SIR under a License and Royalty Agreement with SIR Royalty Limited Partnership. SIR also owns two Duke's Refresher(R) + Bar locations, which are currently not part of the Royalty Pool. For more information on SIR or the SIR Royalty Income Fund, please visit www.sircorp.com.

About SIR Royalty Income Fund

The Fund is a trust governed by the laws of the province of Ontario that receives distribution income from its investment in the SIR Royalty Limited Partnership and interest income from the SIR Loan. The Fund intends to pay distributions to unitholders on a monthly basis.

Caution concerning forward-looking information

Certain statements contained in this report, or incorporated herein by reference, including the information set forth as to the future financial or operating performance of the Fund or SIR, that are not current or historical factual statements may constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Statements concerning the objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of the Fund, the SIR Holdings Trust (the "Trust"), the SIR Royalty Limited Partnership (the "Partnership"), SIR, the SIR Restaurants or industry results, are forward-looking statements. The words "may", "will", "should", "would", 'could", "expect", "believe", "plan", "anticipate", "intend", "estimate" and other similar terminology and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Fund, the Trust, the Partnership, SIR, the SIR Restaurants or industry results, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. These statements reflect Management's current expectations, estimates and projections regarding future events and operating performance and speak only as of the date of this document. Readers should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. Risks related to forward-looking statements include, among other things, challenges presented by a number of factors, including: market conditions at the time of this filing; competition; changes in demographic trends; weather; changing consumer preferences and discretionary spending patterns; changes in consumer confidence; changes in national and local business and economic conditions; pandemics or other material outbreaks of disease or safety issues affecting humans or animals or food products; the ability to maintain staffing levels; the impact of inflation, including on input prices and wages; the impact of the war in the Ukraine; changes in tariffs and international trade; changes in foreign exchange and interest rates; changes in availability of credit; legal proceedings and challenges to intellectual property rights; dependence of the Fund on the financial condition of SIR; legislation and governmental regulation, including the cost and/or availability of labour as it relates to changes in minimum wage rates or other changes to labour legislation and forced closures of or other limits placed on restaurants and bars; laws affecting the sale and use of alcohol (including availability and enforcement); changes in cannabis laws; changes in environmental laws; privacy matters; accounting policies and practices; changes in tax laws; the impact of cybersecurity breaches; and the results of operations and financial condition of SIR. The foregoing list of factors is not exhaustive. Many of these issues can affect the Fund's or SIR's actual results and could cause their actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Fund or SIR. There can be no assurance that SIR will remain compliant in the future with all of its financial covenants under the Credit Agreement and imposed by the lender. Given these uncertainties, readers are cautioned that forward-looking statements are not guarantees of future performance and should not place undue reliance on them. The Fund and SIR expressly disclaim any obligation or undertaking to publicly disclose or release any updates or revisions to any forward-looking statements. Forward-looking statements are based on Management's current plans, estimates, projections, beliefs and opinions, and the Fund and SIR do not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change, except as expressly required by applicable securities laws.

All of the forward-looking statements made herein are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Fund or SIR. For more information concerning risks and uncertainties, please refer to the 'Risk Factors' in the Fund's March 13, 2025 Annual Information Form, for the period ended December 31, 2024, and the Fund and SIR's most recent interim and / or annual filings, which are available under the Fund's profile at www.sedarplus.ca.

SOURCE SIR Royalty Income Fund

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For further information, please contact: Jeff Good, Chief Financial Officer, Tel: 905-681-2997; Bruce Wigle, Bay Street Communications, Tel: 647-496-7856

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