SIR Royalty Income Fund Announces Filing of SIR Corp. Amendment and Extension of Credit Agreement with its Senior Lender

BURLINGTON, ON, June 6, 2023 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN) (the "Fund") today announced that SIR Corp. ("SIR" or the "Company"), the operating entity from which the Fund's equity income is ultimately derived, has completed a Tenth amending agreement (the "Tenth Amending Agreement") to its credit agreement with its senior lender (the "Lender"). The Tenth Amending Agreement, among other things, extends the maturity date of the credit agreement from July 6, 2023 to July 6, 2026, with the exception of the guaranteed facility from Export Development Canada (the "EDC-Guaranteed Facility"), which has a new maturity date of July 6, 2024. Interest rates have been reduced under the Tenth Amending Agreement, with the exception of the interest rate on the guaranteed facility with Business Development Bank of Canada (the "BDC-Guaranteed Facility"), which remains fixed at 4% per annum. Bankers' acceptance fees have also been reduced on Credit Facility 1 and Credit Facility 2. Credit Facility 2 reverts to a revolving term facility.

The Tenth Amending Agreement provides certainty and availability of funding over the next three years, enabling SIR to continue to invest in restaurant renovations and new restaurants to drive growth in revenue and same store sales⁽¹⁾.

The following is a current summary of SIR's credit facilities under the Tenth Amending Agreement:

• Credit Facility 1 – a $20.0 million revolving facility, bearing interest at the prime rate plus 2.75% or the bankers' acceptance rate plus 3.75%, with principal to be repaid on July 6, 2026. As of the current date, SIR has drawn $NIL on Facility 1.
• Credit Facility 2 – a $10.7 million revolving facility, bearing interest at the prime rate plus 2.75% or the bankers' acceptance rate plus 3.75%. Each advance under Credit Facility 2 is repayable in equal quarterly instalments based on a seven-year amortization. Facility 2 is currently fully drawn.
• The $6.25 million EDC-Guaranteed Facility, bearing interest at the prime rate plus 3%. The EDC-Guaranteed Facility is a 364-day revolving term facility that can be extended annually at the Lender's sole discretion. The EDC-Guaranteed Facility is currently fully drawn.
• The $6.25 million BDC-Guaranteed Facility, bearing interest at a fixed rate of 4%. The BDC-Guaranteed Facility is a fully drawn, non-revolving term credit facility. As of the current date, SIR has drawn $5.44 million on the BDC-Guaranteed Facility.

As part of the Tenth Amending Agreement, the Fund and the SIR Royalty Limited Partnership (the "Partnership") also entered into an acknowledgement agreement (the "Acknowledgement Agreement") with the Lender acknowledging, among other things:

• receipt of a copy of the Tenth Amending Agreement, and
• that none of either: entering the agreement, borrowing under the agreement, or performing any of the obligations under the agreement shall breach any of the terms or constitute an event of default under any of the Fund's or the Partnership's existing agreements with the Company.

The Tenth Amending Agreement and the Acknowledgement Agreement can be accessed via the Fund's profile on the SEDAR website at www.sedar.com.

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®, with 37 locations; and Scaddabush Italian Kitchen & Bar® with 10 locations. SIR also operates one-of-a-kind "Signature" brands including Reds® Wine Tavern, Reds® Square One, Reds® Kitchen + Wine Bar Fallsview and The Loose Moose®. 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 one Duke's Refresher® & Bar location in downtown Toronto, and one seasonal Signature restaurant, Abbey's Bakehouse®, which are currently not in consideration to be part of the Royalty Pool. For more information on SIR Corp. 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.

Non-IFRS Financial Measure

 (1) Same store sales ("SSS") is a non-GAAP financial measure and does not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). However, the Fund believes that SSS is a useful measure and provides investors with an indication of the change in year-over-year sales. The Fund's method of calculating SSS may differ from those of other issuers and, accordingly, SSS may not be comparable to measures used by other issuers. SSS includes revenue from all SIR Restaurants included in Pooled Revenue except for those locations that were not open for the entire comparable periods in 2023 and 2022.

Caution concerning forward-looking statements
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 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: the impact of the COVID-19 pandemic; 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 crisis 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; 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.

In formulating the forward-looking statements contained herein, SIR Management has assumed that it will be successful in dealing with the effects of the COVID-19 pandemic and that business and economic conditions affecting SIR's restaurants and the Fund will return to normalcy within the medium term.

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 the Fund's risks and uncertainties, please refer to the March 16, 2023 Annual Information Form, for the period ended December 31, 2022, and the Fund's Management Discussion & Analysis for Q1 2023, which are available under the Fund's profile at www.sedar.com.

SOURCE SIR Royalty Income Fund

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