Form 8-K Assure Holdings Corp. For: Jun 10

June 16, 2021 5:28 PM EDT

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Private & Confidential March 8th, 2021

Assure Holdings Corporation

4600 South Ulster Street, Suite 1225

Denver, Colorado



Mr. John Farlinger, Chief Executive Officer Mr. Trent Carman, Chief Financial Officer


Re:Borrower:Assure Holdings Corporation

Loan Amount: $11,000,000 USO

Note: all amounts expressed herein are denominated in US dollars unless otherwise specified

By this Letter of Commitment {"Commitment"), we are pleased to advise that Centurion Financial Trust, for and on behalf of various funds, as agent and nominee ("the Lender") has approved Senior Credit Facilities totaling

$11,000,000 ("the Loan") to Assure Holdings Corporation ("the Borrower") to be guaranteed by Assure Holdings Inc., Assure Neuromonitoring, LLC and Assure Networks, LLC, and all present and future affiliates of the Borrower such that guarantees are held by the lender from entities that generate not less than 95% of the consolidated revenue and EBITDA and hold not less than 95% of the tangible assets of the Borrower.

The financing program is for the purpose of refinancing the existing senior lender, providing a revolving credit facility, working capital and financing for future acquisitions. The Loan shall be advanced subject to the Preconditions to Closing and Disbursement outlined below and on the terms and conditions described herein. The fi nancing will primarily be evidenced and secured by Centurion's standard form of Debenture and any other documents required thereby to be in such agreed by the parties acting reasonably. The Loan will be available for advance in two or more tranches (as TBD), with the initial advance expected to be drawn by March 31st, 2021.

Please sign in the space provided below and return one of the duplicate originals of this letter to indicate the Borrower's and Guarantors' acceptance of these terms and conditions, whereupon we can finalize due diligence, complete legal documentation and advance.


Subject to the required security, as outlined in the attached checklist, being duly and validly issued and registered, and all other terms and conditions herein having been met, the facility will be advanced as soon as practicable after acceptance, expected to be March 3s1 t, 2021("the Closing Date").



Whether or not the Loan is disbursed, and notwithstanding retention of the specified fees by the Lender, the Borrower shall pay, immediately upon presentation of appropriate invoices, all of the Lender's reasonable third­ party costs and expenses relating to the Loan, whether incurred before or after the initial advance, including due diligence costs, legal costs and expenses. To the extent that any such costs and expenses remain unpaid, the subject amount may, at the Lender's option, be deducted from the Loan disbursement or may be added to the then outstanding principal balance of the Loan and shall bear interest at the same rate as, and be secured in the same manner as the Loan.


In addition to proper completion of the Security, the following conditions must be satisfied prior to disbursement:

Due Diligence: Satisfactory completion of due diligence (as outlined in further detail herein) including, but not limited to financial due diligence, review of material contracts , satisfactory background checks and regulatory and industry due diligence.

Insurance: Insurance binders confirming that insurance policies on an all risks basis pertaining to the Business and its property and operations in compliance with the requirements of the Lender as set out in this Commitment and its standard documentation are delivered to the Lender prior to closing with full certified copies of policies to and delivered within 30 days of closing. The policy endorsement is required to provide that the insurer or broker will notify the Lender directly of any changes in coverage from the actual binder or certificates issued at the time of closing and release of funds.

Legal Opinion: The Lender shall be provided with an opinion letter from a solicitor acting for the Borrower and Guarantor stating that all Security documentation has been duly authorized, executed and delivered by the respective Borrower and Guarantor, that all of the Security is validly binding on the respective Borrower and Guarantors and that all ofthe Security is enforceable in accordance with its terms, except as enforceability may be limited by any applicable bankruptcy, insolvency or other laws affecting creditors' rights generally and by the rules governing the enforceability of provisions of the Security by means of equitable remedies such as specific perf ormance. The opinion letter shall be in such form and contain such other terms as may be required by the Lender.

Security and Registratio n: The Security, as defined in and required by this Commitment and the Debenture , shall be executed, delivered and registered, the charged real property/ properties shall be free and clear of all liens (excluding Permitted Encumbrances as defined in the Debenture) including as to tax arrears , and all other terms and conditions of this Commitment shall have been satisfied.

Appraisal and Environmental: Appraisals, environmental review and other required due diligence will be determined and required based on the specifics of the financing.

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F I NA I\ C L\ Lrr R l -S I'

Material Adverse Change: It is a condition for disbursement of funds that in the Lender's opinion the financial position of the Borrower and the Guarantors (taken as a whole), and the assets given as security (taken as a whole), and the Borrower's representations and warranties, shall not have suffered any material adverse change; nor shall there be any material action, suits, or pending proceedings against the Borrower and/or the Guarantor (taken as a whole) of which the Borrower has knowledge; and that no event shall have occurred, which materially and adversely affects the value of the secured assets (taken as a whole).

Inter-Creditor Agreement(s): Execution and delivery of an inter-creditor agreement (if required) in a form satisfactory to the Lender with the holders of any security on all or substantially all of the Borrower's/ Guarantors' assets, providing for the priority of security interest as first charge and agreement as to rights on default as to payment and exercise of rights as agreed by the Lender. Execution and delivery of subordination agreements for any prior registered charges held on the secured real property or other assets pledged as security.

Execution of Debenture and General Security Agreement(s): Execution and delivery of a Debenture and General Security Agreement(s) in the standard form of the Lender with the supporting documentation as required by the Lender's standard closing requirements.


This will confirm that the Borrower and Guarantor(s) have consented and agree to provide the Lender with such documentation and information, including ident ification, as the Lender may require to ensure compliance with the above Legislation, and that the provision of such documentation and information shall be a Pre-Funding Condition to this Loan.

The Borrower and each Guarantor will be required to produce identification acceptable to Lender and Lender's solicitor at the time the mortgage documentation is signed, and prior to any funds being advanced, for the purpose of compliance with the provisions of the Proceeds Of Crime (Money Laundering) and Terrorist Financing Act (Canada) and Regulations there under. Such identification shall include at least two documents, with at least one document including photo ID, together with a solicitor's confirmation that the Identity of all persons signing as or on behal f of the Borrower or as a Guarantor have been identified as the proper persons to sign. Lender to be provided with copies (front and back) of any ident ification documents together with a solicitor's certification that the copies are true copies of the original documents.


Governing Law: This Commitment , the Debenture and the Security, shall be governed by and constituted in accordance with the laws of the Province of Ontario, unless otherwise agreed t herein .

Time of the Essence: Time in all respects shall be of the essence herein.

Further Assurances: The Borrower shall, at the Lender's request , execute or deliver such further documentation and enter into such other reasonable agreements as are necessary for the securing of the Loan and the fulfilling of the terms contained herein.

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Yours very truly,



Per: ​ ​ ​ ​

Chris D. Lewthwaite

Senior Director, Corporate Finance

Daryl W. Boyce

Executive Vice-President, Corporate Finance

I have authority to bind the Company .

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Borrower: Gurantors:

Lender / Agent:

Assure Holdings Corporation (" Assure")

Assure Holdings Inc.

Assure Neuromonitoring, LLC Assure Networks, LLC

plu s all other subsidiaries and related companies

(the Borrower and Guarantors , collectively the "Assure Group")

Centurion Financial Trust ("Centurion")

Target Closing Date:

March 315


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Financing Purpose & Program:

Use of Funds:(USD SOOO's)Sources of Funds:(USD SOOO's)

Step 1:

Revolving 0-edit Faciilty


Centurion Senior Revolving loan


Working Capital


Refinance of Existing Debt


Centurion Senior Term loan

6,000 .0

Estimated Transaction Fees


Step 2:

Future Growth Capex / Acquisition



Cent urion Senior Term - Acquisition


3,0 00.0

Total Uses of Funds:



Total Sou rces of Funds:


Credit Facilities:Tranche 1:

Tranche 2:

$2,000,000 Senior Revolving Loan

$6,000,000 Senior Term Loan

$3,000,000 Senior Term -Acquisition Line

(collectively, the "Credit Facilities")

Disbursement:Tranche 1 to be disbursed in a single advance once the Financing

Program has been approved by Centurion's investment committee, the completion of due diligence and execution of key legal agreements each to the satisfaction of Centurion.

The initial advance under the Revolving Loan will be determined prior to Closing and over the Term of the financing as TBD. The Borrower will have the right to draw or repay a minimum of $250,000 of the Senior Revolving Loan on a notice period of 10 business days.

Tranche 2 of the Senior Term - Acquisition Line to be made available to fund future acquiistions, subject to the achievement and maintenance of all Financial Covenants and t erms and conditions as outlined herein,

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and also subject to the following:

Centurion to review and approve each acquisition prior to funding for the particular advance, with Centurion's main criteria being its satsiafactory review of due diligence materials supporting all acquisitions to be financed by the Program , which are understood to be accretive in nature and on commercially reasonable terms;
Funds to be advanced on a deal-by-deal basis subject to the Credit Facilities remaining fully in good standing and upon satisfactory review of the acquisition(s) to be financed by the Program;
Assure Group to provide Centuion with a first ranking security interest over the companies assets/ shares to be acquired (as TBD in each case)


Centurion may look to syndicate up to 25% of of the Credit Facilities as as described herein. Our firm has deep relationships with a number of Canadian family off ices that have participated in investments led by Centurion on a passive basis.

Term:4 years

Interest Rate:

Standby Fee:

The greater of 9.50% per annum or Royal Bank of Canada Prime Rate plus 7.05%, payable monthly in arrears.

The Borrower shall pay a Standby Fee of 1.50% per annum on the undrawn balance of the Credit Facilities on a monthly basis, commencing with the initial advance of Tranche 1.

W arrants:


Prepayment Allowance :

In conjunction with the Credit Facilities detailed herein, Centurion will be issued and assigned 12.5 % warrant coverage at a strike price equal to the market closing price ofTSXV:IOM on the date of initial funding. The warrants will not be subject to any lock-up period and will have an expiry of not less than 4 years.

Principal balance of the Credit Facilities shall be repayable in full on the 4th anniversary of the initial advance of Tranche 1.

Prepayment of the Senior Term Loan is to be permitted as follo ws :

Allowance to prepay 25% of the outstanding principal balance of the Senior Term Loan on the 1st anniver sary date;

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Allowance to prepay an additional 25% of the out st anding principal balance of the Senior Term Loan (for a cumulative total prepayment allowance of up to 50%) on the 2nd anniversary dat e;
Allowance to prepay an add itional 25% of the outstanding principal balance of the Senior Term Loan (for a cumulative total prepayment allowance of up to 75%) on the 3rd anniversary date;
Suitable notice period of 30 business days to be provided in advance of each applicable Prepayment

Any other prepayment of the Senior Term Loan or Senior Term - Acquisition Loan otherthan as detailed above shall be subject to a 12 months interest penalty

Mandatory Prepayments :

Commitment Fee:


Mandatory prepayment of the Credit Facilitie s to include the net cash proceeds of the following:

Sale of any assets of the Assure Group other than inventory sold in the normal course of operations;
Proceeds of the issuance or sale of any debt interests, other than for Permitted Indebtedness;
Proceeds of any insurance claims unless reinve st ed into the the Assure Group

The Borrower will pay to the Lender a non-refundable Commitment Fee of

$247,500 (representing 2.25% of the loan amount) plus applicable t axes.

The Lender acknowledges that the Borrower has paid an initial Deposit of

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$75,000 based on its previous acceptance of the DiscussionPaper dated March

, 2021.

The Deposit shall be dealt with as follows:

if the Financing Program closes, the Deposit will be credited against the Commitment Fee;
Sinc e the Financing Program has now been approved by Cent urion's Investment Committee on substantiall y the same terms and condition as outlined in the Discussion Pap er, if the Borrower chooses not to proceed with the Facility for any reason and not accept the Commitment , the full amount of the Commitment Fee will be deemed to be fully earned and payable to the Lender and with the Deposit as non-refundable. The Borrower will also be respon sible for any and all expenses including legal and due diligence expenses incurred by the Lender with such expenses being to the account of the Borrower .

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Financial Covenants:

Security for the Credit Faciliteis to include the following:

General Security Agreement of the Borrower providing for a first ranking security interest in all of the present and future assets of Assure Holdings for the markets in which the Borrower operates;
Guarantee of the various corporate Guarantor entities outlined above, each supported by a first ranking General Security Agreement securing all present and future assets of the Assure Group as a whole with the exception of an allowance for the existing first charge on equipment currently being leased {NTD: leases to be confirmed);
For additional advances under the Program to fund future acquisitions, Centurion will review the specific deal parameters to ensure that each acquisition: (i) is accretive to forecast EBITDA; (ii) the assets being acquired support forecast advances and security coverage; and, (iii) debt service coverage covenant is maintained;
Assignment of key contracts as TBD;
Satisfactory intercreditor agreement, if required;
Landlord Waivers for the operating premises of the Assure Group, as TBD;
Negative pledge on future borrowings or granting of security interests;
Postponement and subordination of all Shareholder and Related Party Loans (excluding intercompany advances as related to the normal course of operations) as TBD;
Insurance appropriate to the risks involved will be maintained, with loss payable to Centurion;
Such other security as may be required by Centurion

The following Financial Covenants are to apply to the terms of the Credit Facilities as to be tested quarterly on a consolidated basis. The Borrower will provide a Compliance Certificate signed by an Officer of the Borrower detailing its calculations of the Financial Covenants along with its regularly scheduled financial reporting package.

The following Financial Covenants shall be applicable:

Minimum Working Capital Ratio of 1.20:1, defined as:

the ratio of Current Assets to Current Liabilities

Minimum Fixed Charge Coverage Ratio of 1.25:1, defined as:

the ratio of EB/TOA less Cash Taxes and Unfunded Capital Expenditures divided by all scheduled Lease payments and scheduled Principal and Interest payments of all debt facilities

Maximum Funded Debt to EBITDA Ratio of 4.50:1, defined as:

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The ratio of the total outstanding balances of all indebtedness including the outstanding balances all credit facilities including capital leases, term loans, bank indebtedness etc. plus the balances of any non-postponed related party credit facilities, if applicable, divided by EB/TOA

In finalizing its due diligence, Centurion will give consideration to appropriate normalizing adjustments on a historical basis for the calculation of financial covenants.

Negative Pledge on Additonal Debt or the Encumbrance of Assets

Reporting Requirements:

Preconditions to Closing:

The Borrower and Gurantors will provide the its financial statements on the following basis:

Annual consolidated Audited financial statements of Assure Holdings Corporation;
Quarterly financial statements and signed compliance certificate detailing financial covenant calculations;
Monthly reporting of Borrowing Base as TBD based on our due diligence review, in support of the Senior Revolving Loan (e.g. detailing aged accounts receivable balances, revenue billings & collections activity and any potential adjustments to receivables balances along with supporting detail thereof);
Annual budget/ forecast to be provided
Other reporting as may be required by Centurion

The following are Conditions Precedent to be completed to Centurion's satisfaction prior to Closing:

Execution of key legal agreements;
Completion and satisfactory review of Field Audit and third party due diligence as it relates to Assure Group's receivables, billings & collections practices (e.g. monthly review of collection trends/ waterfall for individual receivables for the timing of collection, amounts collected vs. invoiced, evaluation of how receivables have been valued post Q2 2020, recovery trends for past receivables that had previously been written off etc.);
Financial due diligence as it relates to the historical financials of the Assure Group as it relates to gross and net revenue composit ion, adjustments to revenues attributed to prior year receivables re­ evaluation and determination/confirmation of 'cash-basis' reporting for current and historical financing reporting of the Assure Group;

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Satisfactory review of interim year-to-date results of Assure Group and its updated financial projections/ model (including review of sales pipeline) and key assumptions thereof;
Further discussion/ analysis of the structure of acquisitions to be financed (potentially using the Sentry Neuromonitoring example as a proxy for future acquisitions);
Regulatory and industry due diligence, as TBD (including confirmation of compliance with appropriate regulatory agencies etc);
Satisfactory receipt of a payout letter from Central Bank and Trust;
Satisfactory background checks of the shareholders , KYC, AML requirements etc.;
Centurion being satisfied that there has been no material deterioration or material adverse change of the Assure Group business prior to Closing

Exclusivity/ Confidentiality:The Assure Group agrees that it will not communicate the existence or

Contents of this Commitment to any third parties other than its financial advisors

I accountant or legal counsel without the prior written consent of Centurion .

If the Assure Group sources financing from another lender or agent other than Centurion, the Commitment Fee shall be immediately payable in full to Centurion .

Positive Covenants:Usual and customary for transaction of this type, including, but not

limited to the following:

Punctual payment and performance of all obligations owing under Commitment;
Conduct of business and maintenance of corporate existence;
Ongoing compliance and maintenance of good standing with regulatory authorities;
Debt Servicing;
Operation and maintenance of business, properties and equipment required the Assure Group in good repair and working condition, reasonable wear and tear excepted;
Payments of statutory obligations, taxes, remittances and assessments;
Maintain adequat e insurance on all assets, unde rt akings, product liabilities and business risks;
Financial records/books and inspect ion rights;
Arm's length arrangements with affiliates and non-Guarantors;
Further assurances;
Use of Proceeds ;

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Compliance with all regulations, laws, permits, and material agreements;
Maintain security priority, registrations and delivery of security as required hereby;
In the event that any subsidiary becomes a Material Subsidiary, within 30 days thereof: (i) notify the Lender, and (ii) deliver applicable guarantee and security to the Lender;
Promptly advise the Lender after the occurrence of any event which would result in a Material Adverse Effe ct, or the occurrence of any default of Event of Default;
Compliance with all ERISA requirements (if applicable);
Comply with anti-terrorism, export sanctions and anti-money laundering laws;
Maintain ownership right or rights to use all intellectual property material to the business of the Borrower and Guarantors;
Notify the Lender of any award or commencement or written threat of any litigation or dispute affecting any Borrower or subsidiary (a) in excess of $100,000, or (b) relating to material intellectual property; and
Promptly provide the Lender with all information reasonably requested.

Negative Covenants:

Usual and customary for transactions of this type, to include but not limited to the following:

a)Negative pledge other than Permitted Liens. " Permitt ed Liens" shall include, without limitation:
Liens created or arising under or in connection with the Security;
Statutory liens; and
Other permitted liens as may be approved by the Lender
b)Limitations on indebtedness other than Permitted Indebt edness. Permitted Indebtedness to include, without limitation;
Any debt obligation under Cash Management Facilities, and Cross Currency Hedge Obligations;
Other permitted indebtedness as may be approved by the Lender;
c)Limitation on investments and financial assistance;
d)Limitation on asset sales other than: sale of inventory in the ordinary course of business, sale of other assets up to $200,000 per annum;
e)Restriction on distributions without the Lender's consent;

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f)Limit ations Capital Expendituresother than Permitted Capital Expenditures. Permitted Capital Expenditures defined as: 110% of budgeted capital expenditures, to be agreed annually by the Lender;
g)Limitations on acquisitions;
h)No material change in the nature of the business, including no material change with the Assure Group's compliance with applicable regulatory authorities;
i)Restriction on int er-company transfers of assets to non -Guarant ors;
j)No mergers, amalgamations or consolidations, other than among the Assure Group or, if with any other member of the group, Borrower or a Guarantor is the surviving entity and the Lender shall have received such documentation, as it may reasonably request, from the surviving entity to ensure all of its property and assets are subject to the Security and it is otherwise fully bound by the Loan Documents; and
k)No defined benefit pension plans; no termination of other pension plans; no failure to make required payments in respect of pension plan s; no failure to deliver filings with respect to pension plans.

Representations and Warranties:

Usual and customary for t ransactions of this type, including but not limited to the following:

Corporate matt ers, organization and good standing;
Full corporate right, power, and authority to enter into, and perform its obligations under the loan documents;
Accuracy of finan cial statements, disclosure and other information provided;
The most recent financial statements of the Borrower and Guarantors fairly present the consolidated financial condition of the Borrower and Guarantors as at the date thereof and have been prepared in accordance with accepted accounting standards;
No Material Adverse Effect since the date of the most recent financial st atement s provided to the Lender;
No material litigation or environmental liability;
Validity of loan documents and enforceability;
No violation of any law or contract;
No violation of, or conflicts with, agreements or instruments;
Compliance with applicable laws and regulations (including environmental, anti-money laundering, ERISA ma tt ers, the PATRIOT Act, margin regulations , law s applicable to sanctioned

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persons, the Foreign Corrupt Practices Act, and similar applicable legislation);

Payment of taxes;
Insurance in appropriate amounts and for appropriate risks is in place;
No Event of Default or default;
All payment obligations of the Borrower and Guarantors under the loan documents rank at least pari passu in right of payment with their other most senior secured indebtedness for borrowed money, other

Legal Fees & Diligence Expenses:

Credit Documents:

Offer Expiration Date:

The Assure Group will be responsible for all of Centurion's legal fees and due diligence expenses incurred in respect of the Financing Program .

The Credit Facilities will be established upon negotiation and execution of this Commitment based on summary terms and conditions herein and customary yield protection provisions regarding capital adequacy, reserves, taxes, regulatory change, etc. (the

"Commitment " ), intercreditor agreement (if applicable), guarantees, secur it y and related documentation, including any other agreements and legal opinions as the Lender's counsel may reasonably require for transactions of this nature (collectively, the "Loan Documents").

This Commitment must be accepted by no later than 5 pm EST on Mar ch 11th, 2021, after which it will expire.



Accepted on the terms and conditions herein provided this _11 ​ ​

day of _ M arch.

_, 2021

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As lender agent and nominee for Lenders from time to time collectively as the Lender



as the Corporation



as Guarantors



June9 , 2021


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Principal Amount: $11,000,000 USDIssue Date: June

9 , 2021

Maturity Date: June

9 , 2025Currency: US Dollars



1.1Principal Amount and Advance

(a)For value received, ASSURE HOLDINGS CORPORATION (the “Corporation”) having its head office at 4600 South Ulster Street, Suite 1225, Denver, Colorado 80237, shall pay to the order of CENTURION FINANCIAL TRUST, as lender, agent and nominee for the lenders who advance funds drawn pursuant to the Commitment Letter (being the letter of March 8, 2021 issued by the Lender to the Corporation, the “Commitment Letter”) and this Debenture (as agreed and allocated among them as they shall agree from time to time) (collectively the Lender”) the amount of ELEVEN MILLION DOLLARS ($11,000,000) (the “Commitment”), or the aggregate principal amount drawn and outstanding from time to time pursuant to this Debenture, plus all accrued interest thereon in accordance with this Debenture on the Maturity Date, or such earlier date as the Obligations shall become due and payable hereunder, at the office of the Lender at 25 Sheppard Avenue West, Suite 1800, Toronto, ON M2N 6S6 or such other place as the Lender may designate.

(b)The Commitment will be available for Advance in multiple tranches to be advanced as follows:

(i)with respect to the Senior Term Loan, to be Advanced by way of a single draw, to be drawn and advanced on or about June 9 , 2021;
(ii)with respect to the Revolving Loan, to be Advanced, from time to time, as set out in section 1.4(c) hereof, the first to be drawn and advanced on or about June 9 , 2021; and,

(iii)with respect to the Senior Term – Acquisition Line, to be Advanced, from time to time, as set out in Section 1.4(b) hereof, each in the amount to be agreed to fund an approved acquisitions by the Corporation, in each case to be determined on a deal-by- deal basis.

1.2Interest and Standby Charge

(a)The principal amount of this Debenture drawn and outstanding from time to time shall bear interest both before and after maturity, default and judgment from the date hereof to the date of repayment in full at the rate of the greater of 9.50% or the Royal Bank of Canada Prime Rate plus 7.05% (the Rate”) per annum calculated and compounded monthly in arrears and payable

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on the first Business Day of each month during which any Obligations are outstanding, the first of such payments being due July 2, 2021 for the period from the Advance to the date of payment, and thereafter monthly.

(b)The difference between the Commitment and the amount of the Loan outstanding from time to time shall bear a standby charge, for the period between June9, 2021 and the end of the availability period, in the amount of 1.50% (the “Standby Charge”) per annum calculated and compounded monthly in arrears and payable on the first Business Day of each month during which any amount of the Commitment remains available and undrawn, the first of such payments being due July 2, 2021.

(c)Interest on overdue interest shall be calculated and payable at the same rate plus 3% per annum. Interest is pro rated on a daily basis for any part month.


(a)With respect to the Senior Revolving Loan, the Corporation may prepay Advances outstanding thereunder from time to time, with not less than 10 Business Days prior written notice of the prepayment date and the amount, in the minimum amount of $250,000. Any amount of the Senior Revolving Loan prepaid may be re-advanced.

(b)With respect to the Term Loans, the Corporation may prepay the Advances outstanding thereunder, without penalty or bonus, in an amount not to exceed 25% of the aggregate of all Advances then outstanding under the Term Loans, on each anniversary date of the first Advance made hereunder, provided in each case with not less than 30 days written notice of the Corporation's intention to prepay on such anniversary date and the proposed prepayment amount. Any prepayments to the Term Loans other than those permitted in the immediately preceding sentence may only be made on 30 days prior written notice of the prepayment date and the amount, and are subject to the Corporation paying on such prepayment date a prepayment charge equal to the lesser of (i) twelve (12) months interest and (ii) interest for the months remaining from the prepayment date to the Maturity Date, on the amount prepaid at the interest rate in effect on the applicable Term Loan as of the date of prepayment. Any amount of the Term Loan prepaid may not be re-advanced.

1.4Repayments and Cancellation of Commitment

(a)The Corporation shall satisfy the obligations on the Maturity Date by the Corporation paying the principal amount (or the drawn and outstanding balance thereof) together with any accrued and unpaid interest and expenses of the Lender of this Debenture to the Lender by certified cheque, bank draft or wire transfer in immediately available funds.

(b)The Senior Term – Acquisition Line will remain available for draw, with notice of draw being given on 30 days prior written notice.

(c)The Senior Revolving Loan shall revolve and no payment under the Senior Revolving Loan shall reduce the Commitment in respect thereof. Advances on the Senior Revolving Loan may be requested by the Corporation with not less than 10 Business Days prior written notice of

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such requested Advance and the amount, in the minimum amount of $250,000. Advances outstanding under the Senior Revolving Loan to the Corporation shall not exceed $2,000,000.


The Corporation will owe and pay to the Lender on first Advance of the Loan, less deposits paid to date which will be credited, a fee for 2.25% of the Commitment being $247,500, payment will be made by withholding from the Advance.


The Guarantors signing this Debenture do so for the purpose of agreeing to the representations and covenants set out herein.


In consideration for the Commitment, and subject to the approval of the TSX Venture Exchange (the “TSXV”), the Corporation will issue to the Lender, 1,375,000 common share purchase warrants (the Warrants”), representing 12.5% of the aggregate value of the Commitment. Each such Warrant will entitle the Lender to purchase one common share in the capital of the Corporation at an exercise price equal to the last closing price of the Corporation’s common shares as of the date of the press release announcing the Commitment and issuance of the Warrants. Pursuant to the policies of the TSXV, the Warrants will be non-transferable and subject to applicable hold periods under Canadian and U.S. securities laws. The Warrants shall have a term that expires four years from the date of issuance.

The Lender hereby confirms that it is an “accredited investor” (as such term is defined in National Instrument 45-106 Prospectus Exemptions (“NI 45-106”)) by virtue of meeting the criteria set out in paragraph (m) of the definition of “accredited investor” in section 1.1 of NI 45- 106.

2.1Defined Terms


As used herein the following terms shall have the following meanings:

(a)Advance means an advance of the Loan by the Lender.

(b)Affiliate” means, in respect of any corporation, any Person which, directly or indirectly, controls or is controlled by or is under common control with the corporation; and for the purpose of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the power to direct, or cause to be directed, the management and

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policies of a corporation whether through the ownership of Voting Shares or by contract or otherwise.

(c)Applicable Law” means, in respect of any Person, property, transaction or event, all applicable laws, statutes, rules, by‒laws and regulations, and all applicable official directives, orders, judgments and decrees, of Governmental Bodies, including specifically all relating to anti-money laundering, anti- terrorism, sanction and anti-bribery.

(d)Assignment of Insurance means the collateral assignment of insurance provided by the Corporation and the Guarantors to the Lender as security for the Obligations.

(e)Business Day” means any day other than Saturday, Sunday or a day on which chartered banks are closed for business in Toronto, Ontario.

(f)Capital Lease Obligations” means, as to any Person, the obligation of such Person to pay rent or other liquidated amounts under a lease of (or other agreement conveying the right to use) real or personal property, which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under generally accepted accounting principles and, for purposes of this Debenture, the amount of such obligations shall in each case be the capitalized amount thereof, determined in accordance with generally accepted accounting principles.

(g)Change of Control” means the Guarantors ceasing to be, directly or indirectly, wholly owned by the Corporation (or by the Guarantors that assume the obligations under this Debenture as contemplated by this Debenture) or its successor.

(h)Commitment shall have the meaning in section 1.1.

(i)Contingent Liabilities” of any Person at any time means the amount of all indebtedness and liabilities, contingent or otherwise, of any other Person at such time:

(i)guaranteed, directly or indirectly, in any manner by the Person including:
(A)by procuring the issue of letters of credit or letters of guarantee or other similar instruments for the benefit of that other Person; (B) by endorsement of bills of exchange (otherwise than for collection or deposit in the ordinary course of business); or (C) by the other Person assigning debts of the Person (whether or not represented by an instrument) with recourse to the Person;

(ii)in effect guaranteed, directly or indirectly, by the Person through an agreement, contingent or otherwise;

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(iii)to purchase such indebtedness or liabilities or to advance or supply funds for the payment or purchase of such indebtedness or liabilities;

(iv)to purchase, sell or lease (as lessee or lessor) property, products, materials or supplies or to purchase or sell services in circumstances where it can reasonably be assumed that the purpose of such agreement was to provide funds to the other Person to enable the other Person to make payment of such indebtedness or liabilities or to provide goods or services to the other Person to enable it to satisfy other liabilities, regardless of the delivery or non‒delivery of the property, products, materials or supplies or the provision or non‒provision of the services, including take or pay or through put agreements; or

(v)to make any loan, advance, capital contribution to or other investment in the other Person for the purpose of assuring a minimum equity, asset base, working capital or other balance sheet condition at any date or to provide funds for the payment of any liability, dividend or return of capital; or

(vi)secured by any Encumbrance upon property owned by the Person, even though the Person has not assumed or become liable for the payment of such indebtedness or liabilities, provided that, if the Person has not agreed to such assumption, such indebtedness shall be deemed to be an amount equal to the lesser of (A) the amount of such indebtedness and liabilities and (B) the book value of such property.

(j)Debenture means this Debenture together with the schedules and exhibits hereto, as they may be amended from time to time.

(k)Corporation shall have the meaning ascribed to such term in Section 1.1.

(l)“Credit Party means any of the Corporation or a Guarantor.

(m)Default” means any event which, but for the lapse of time, giving of notice or both, would constitute an Event of Default.

(n)EBITDA” means, with respect to the Corporation (on a consolidated basis), for any applicable period, an amount equal to earnings from operations before interest, income taxes, depreciation and amortization, calculated as follows:

(i)net income of the Corporation for such period;

(A)minus the sum of:

(1)gain from extraordinary items for such period;

(2)any aggregate net gain (but not any aggregate net loss) during such period arising from the sale, exchange or other disposition of capital assets by the Corporation (including

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any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities); and

(3)any other non‒cash gains which have been added in

determining net income,

in each case to the extent included in the calculation of net income of the Corporation for such period in accordance with generally accepted accounting principles but without duplication,

(B)plus the sum of:

(1)any provision for income taxes;

(2)interest expense;

(3)loss from extraordinary items for such period; and

(4)the amount of non‒cash charges (including depreciation, amortization and non-cash expenses relating to stock based compensation or accretion),

in each case to the extent included in the calculation of net income of the Corporation for such period in accordance with generally accepted accounting principles, but without duplication.

(o)Eligible Accounts” means, collectively, all Technical Revenues, PNE Revenues and Government / Hospital Revenues.

(p)Encumbrance” means any mortgage, lien, pledge, assignment, charge, security interest, title retention agreement, hypothec, levy, execution, seizure, attachment, garnishment, right of distress or other encumbrance in respect of property of any nature or kind whatsoever howsoever arising (whether consensual, statutory or arising by operation of law or otherwise) and includes arrangements known as sale and lease‒back, sale and buy‒back and sale with option to buy‒back.

(q)Event of Default has the meaning ascribed to such term in Section 6.1.

(r)Environmental Laws” means all applicable federal, provincial, state, municipal or local laws, statutes, regulations or ordinances relating to the environment, occupational safety, health, product liability and transportation.

(s)Environmental Order means any prosecution, order, decision, notice, direction, report, recommendation or request issued, rendered or made by any Governmental Body in connection with Environmental Laws.

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(t)Funded Indebtedness” means, with respect to any Person at any particular time, the aggregate (without duplication) of the following amounts determined in accordance with generally accepted accounting principles at such time:

(i)indebtedness for money borrowed and indebtedness represented by notes payable and drafts accepted representing extensions of credit (including, as regards any note or draft issued at a discount, the face amount of such note or draft) and including the face amount of bankers’ acceptances and letters of credit;

(ii)all obligations (whether or not with respect to the borrowing of money) which are evidenced by bonds, debentures, notes or other similar instruments or not so evidenced but which would be considered to be indebtedness for borrowed money in accordance with generally accepted accounting principles;

(iii)all indebtedness for borrowed money secured by an Encumbrance on any property of such Person;

(iv)all indebtedness upon which interest charges are customarily paid;

(v)Capital Lease Obligations and all other indebtedness issued or assumed as full or partial payment for property or services or by way of capital contribution;

(vi)any Contingent Liability relating to an obligation of a type referred to in
(i)to (v) above; and

(vii)any of the foregoing amounts in respect of any Subsidiary of the Person whose accounts are not required under generally accepted accounting principles to be consolidated with the accounts of such Person,

including the aggregate outstanding amount of the Obligations at such time; but for greater certainty, trade payables, expenses, costs and charges accrued in the ordinary course of business, customer advance payments and deposits received in the ordinary course of business shall not constitute Funded Indebtedness.

(u)General Security Agreements” means the agreement creating security over all personal property of the Corporation and the Guarantors.

(v)Government / Hospital Revenue” means revenue generated by the Corporation, or its Subsidiary, billed directly to a hospital for a patient that has a government funded insurance plan and the Corporation performes the technical component of interoperative monitory, in each case, paid on a per-case and per-time basis, in a rate specified in the applicable contract between the Corporation, or its Subsidiary, and the relevant hospital.

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(w)Governmental Body” means any government, parliament, legislature, or any regulatory authority, agency, commission or board of any government, parliament or legislature, or any court or any other law, regulation or rule-making entity (including any central bank, fiscal or monetary authority or authority regulating banks), having or purporting to have jurisdiction on behalf of any applicable government, parliament or legislature or any Person exercising or entitled to exercise administrative, regulatory or taxing authority under the authority of any of the foregoing.

(x)“Guarantee means a guarantee of a Guarantor.

(y)Guarantors” means, collectively and individually, Assure Holdings Inc., Assure Neuromonitoring, LLC, Assure Networks, LLC, Assure Neuromonitoring Colorado, LLC, Assure Neuromonitoring Louisiana, LLC, Assure Neuromonitoring Michigan, LLC, Assure Neuromonitoring Pennsylvania, LLC, Assure Neuromonitoring Texas, LLC, Assure Neuromonitoring Texas Holdings, LLC, DNS Louisiana, LLC, Assure Neuromonitoring Arizona, LLC, Assure Neuromonitoring Minnesota, LLC, Assure Neuromonitoring Nevada, LLC, Assure Neuromonitoring South Carolina, LLC, DNS Professional Reading and those other wholly-owned Subsidiaries of the Corporation which may, from time to time, be required to provide a Guarantee hereunder.

(z)Hazardous Substance means any substance or combination of substances which is or may become hazardous, toxic, injurious or dangerous to persons, property, air, land, water, flora, fauna or wildlife, and includes but is not limited to any contaminants, pollutants, dangerous substances, liquid wastes, industrial wastes, hauled liquid wastes, toxic substances, hazardous wastes, hazardous materials or hazardous substances as defined in or pursuant to any Environmental Laws or Environmental Orders pursuant thereto.

(aa) Initial Term means the 48 month period from the initial Advance to the Maturity Date.

(bb) Initial Test EBITDA means an amount determined by adding together EBITDA for the calendar months ending November 30, 2021 and December 31, 2021, dividing the sum by 2 and multiplying the quotient by 3.

(cc) Instruments means the Commitment Letter, this Debenture, the Security Documents, and any other agreements or instruments (whether now existing, presently arising or created in future) delivered by or on behalf of the Corporation or any Guarantor to the Lender in respect of this Debenture.

(dd)Lender shall have the meaning ascribed to such term in Section 1.1.

(ee) Loan” means the drawn amount of the Commitment which constitutes a draw on the debt obligations described in this Debenture.

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(ff) Material Adverse Effect” means a material adverse effect upon the business, assets, financial condition or prospects of the Corporation and the Guarantors, taken as a whole, or upon their ability to perform their obligations under any of the Instruments.

(gg) Material Authorization means, with respect to any Person, any approval, permit, licence or similar authorization (including any trademark, trade name or patent) from, and any filing or registration with, any Governmental Body or other Person required by such Person to own its property and assets or to carry on its business as presently carried on by it or as contemplated hereunder to be carried on by it in each jurisdiction in which it does so or is contemplated to do so, where the failure to have such approval, permit, licence, authorization, filing or registration would have a Material Adverse Effect.

(hh)Maturity Date shall mean June 9 , 2025.

(ii)Obligations” means all obligations and liabilities now or at any time and from time to time hereafter owing or payable by the Corporation or any Guarantor to the Lender under or in connection with the Instruments.

(jj) Order” means any order, notice, direction, report, recommendation or decision rendered by any Governmental Body.

(kk)Permitted Encumbrances means, in respect of any Person:

(i)encumbrances for taxes, assessments or governmental charges incurred in the ordinary course of business that are not yet due and payable or the validity of which is being actively and diligently contested in good faith by the relevant Person, provided adequate reserves with respect thereto are maintained on the books of the relevant Person in accordance with generally accepted accounting principles;

(ii)construction, mechanics’, carriers’, warehousemen’s and materialmen’s liens and liens in respect of vacation pay, workers’ compensation, employment insurance or similar statutory obligations, provided the obligations secured by such liens are not yet due and payable or the validity of which is being actively and diligently contested in good faith by the relevant Person, provided adequate reserves with respect thereto are maintained on the books of the relevant Person, and, in the case of construction liens, which have not yet been filed or for which the relevant Person has not received written notice of an Encumbrance or which singly or in the aggregate do not materially detract from the value of the asset concerned or the Lender’s security;

(iii)encumbrances arising from court or arbitral proceedings, provided that the claims secured thereby are being contested in good faith by the relevant Person, provided adequate reserves with respect thereto are maintained on the books of relevant Person in accordance with generally accepted

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accounting principles, execution thereon has been stayed and continues to be stayed and such Encumbrances do not result in an Event of Default;

(iv)good faith deposits made in the ordinary course of business to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money), leases, surety, customs, performance bonds and other similar obligations;

(v)deposits to secure statutory obligations or in connection with any matter giving rise to an Encumbrance described in (ii) above;

(vi)deposits of cash or securities in connection with any appeal, review or contestation of any Encumbrance or any matter giving rise to an Encumbrance described in (i) or (iii) above;

(vii)zoning restrictions, easements, rights of way, leases or other similar encumbrances or privileges in respect of real property which in the aggregate do not materially affect the value of such property and any related Security Document nor impair the use of such property by the relevant Person in the operation of its business, and which are not violated in any material respect by existing or proposed structures or land use;

(viii)encumbrances in favour of the Lender pursuant to this Debenture;

(ix)security given by the relevant Person to a public utility or any Governmental Body, when required by such utility or Governmental Body in connection with the operations of the relevant Person, in the ordinary course of its business, which singly or in the aggregate do not materially detract from the value of the asset concerned or materially impair its use in the operation of the business of the relevant Person;

(x)security interests charging property acquired, which is granted or assumed or which arises by operation of law in favour of the transferor concurrently with and for the purpose of the acquisition of such property, in each case where (i) the principal amount secured by the security interest is not in excess of the purchase price (after any post-closing adjustment) of the property acquired, and (ii) such security interest extends only to the property acquired and its proceeds, including capital leases; and,

(xi)any other Encumbrance which the Lender approves in writing as a Permitted Encumbrance subsequent to the date hereof.

(ll)   Person” means a natural person, partnership, corporation, joint stock company, trust, unincorporated association, joint venture or other entity or governmental entity, and pronouns have