Mr. Jeff Good reports

SIR CORP. ANNOUNCES CREDIT AGREEMENT WITH NEW SENIOR LENDERS

SIR Corp., which has several agreements and interests related to SIR Royalty Income Fund, has entered into a 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 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 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, chief executive officer 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 $800,000, 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 $250,000 to finance capital spending on new restaurants pursuant to SIR's annual business plan. Nine hundred thousand dollars are 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 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 licence 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 co-operate with the fund to protect stakeholder interests.

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 LP and interest income from the SIR loan. The fund intends to pay distributions to unitholders on a monthly basis.

We seek Safe Harbor.