Exhibit 10.30

EMPLOYMENT AGREEMENT

SUNLINK HOMECARE SERVICES, LLC (the “Company”), and George D. Shaunnessy
(“Executive”) enter into this Employment Agreement (the “Agreement”) as of
_______ ___, 2008, but effective as of the Closing Date under that certain Stock
Purchase Agreement dated as of April 22, 2008 by and among Carmichael’s Cashway
Pharmacy, Inc. (the “Subsidiary”), the Stockholders of Carmichael’s Cashway
Pharmacy, Inc. and SunLink Healthcare Services, LLC (the “Stock Purchase
Agreement”). Such Closing Date under the Stock Purchase Agreement and the
effective date of this Agreement each is hereinafter referred to as the
“Effective Date”).

WHEREAS, on the Effective Date, the Subsidiary shall become a wholly-owned
subsidiary of the Company and an indirect subsidiary of SunLink Health Systems,
Inc. (“Parent”);

WHEREAS, the Company desires to employ Executive and Executive desires to accept
employment with the Company as of the Effective Date under the terms and
conditions set forth herein; and

WHEREAS, the Company and Executive desire to set forth in writing the covenants,
terms and conditions of their agreement and understanding as to such employment.

NOW THEREFORE, in consideration of the foregoing, the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

1. EMPLOYMENT.

The Company hereby agrees to employ Executive, and Executive hereby agrees to be
employed by the Company, upon the terms and subject to the conditions set forth
in this Agreement.

2. TERM OF EMPLOYMENT.

Executive’s employment with the Company and the performance of this Agreement
shall be deemed to have commenced on the Effective Date and shall end on the
third (3rd) anniversary of the Effective Date (the “Initial Term”) unless
earlier terminated pursuant to Section 5 of this Agreement. At the end of the
Initial Term (and each successive term, if any) of this Agreement, this
Agreement (unless earlier terminated pursuant to Section 5) shall automatically
renew for additional one (1) year terms unless terminated upon at least six
(6) months prior written notice to Executive or otherwise terminated pursuant to
Section 5 prior to the expiration of the term then in effect (the Initial Term
and any subsequent term hereinafter the “Employment Term”).

3. DUTIES AND RESPONSIBILITIES.

(a) Certain Duties and Responsibilities. The Company hereby employs Executive,
and Executive hereby accepts employment, as President of the Company.
Executive’s responsibilities will include those as outlined in Exhibit A.
Executive shall also be

 

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responsible for such other managerial or executive position(s) as may from time
to time be specified by Parent.

(b) Certain Obligations. Executive agrees to serve in such capacities and to
faithfully and diligently perform such duties, responsibilities and services
that are incidental thereto, as well as such other duties, responsibilities and
services as may be prescribed or requested from time to time by the chief
executive officer of Parent or his designee or by the Board of Directors of the
Company (“Board of Directors”) or the board of directors of the Parent.
Executive shall report directly to the chief executive officer of Parent and
shall devote his full time, attention and best efforts to the performance of his
duties, responsibilities and services to the Company in a lawful manner and in
accordance with the policies and procedures of the Company and instructions from
the chief executive officer of Parent or his designee or by the Board of
Directors. Executive may participate in outside charitable and/or civic
activities provided that such activities (i) do not violate the restrictive
covenant requirements set forth in Section 6 below, and (ii) are not
inconsistent with Executive’s duties under this Agreement and will not be
disadvantageous to the Company. While employed by the Company, Executive agrees
not to engage in any other employment, occupation, consulting or other business
activity and will not engage in any activity that conflicts with the Executive’s
obligations to the Company, without prior express written approval of the Board
of Directors.

(c) Compliance with Laws and Policies. Executive agrees (i) to comply with all
applicable laws, rules and regulations, and all requirements of all applicable
regulatory, self-regulatory, and administrative bodies; and (ii) to comply with
the Company’s rules, procedures, policies, requirements, and directions.

4. COMPENSATION AND BENEFITS.

(a) Base Salary. During the Employment Term, the Company shall pay Executive a
base salary at the annual rate of $285,000 per year (pro rated for any partial
year) or such higher rate as may be determined based upon an annual review by
the Compensation Committee of the board of directors of the Parent (“Base
Salary”). Such Base Salary shall be paid in substantially equal monthly
installments in accordance with the Company’s payroll policies.

(b) Benefit Plans, Fringe Benefits and Vacations. Executive shall be eligible to
participate in or receive benefits under employee benefit or fringe benefit
plans, including health, dental and disability insurance, generally made
available by (i) the Company to its executives or (ii) by Parent to officers of
its subsidiaries, in each case without duplication Executive’s entitlement to
such benefits shall be determined in accordance with Company policy as
established or approved from time to time by the Board of Directors and/or the
board of directors of the Parent and the eligibility requirements of such plans.

(c) Expense Reimbursement. The Company shall reimburse Executive for such of the
ordinary and necessary business expenses incurred by Executive in the
performance of his duties under this Agreement as shall be reimbursable in
accordance with the Company’s policies and practices applicable to executives,
provided at all times that such expenses are incurred and accounted for in
accordance with the Company’s policies. In no event shall Executive be

 

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entitled to reimbursement of an expense the proof for which is submitted more
than 45 days following the close of the fiscal year in which such expense was
incurred.

(d) Annual Bonus Plans. Executive shall be eligible for the fiscal year ending
June 30, 2008 (prorated) and thereafter to be considered for an annual
performance bonus of up to 60% of his Base Salary in the discretion of the
Compensation Committee of the board of directors of Parent a portion of which
may be discretionary and a portion of which may be based on attainment of
performance objectives approved by the Board of Directors of the Company with
the consent of Parent, in its sole and absolute discretion, and Executive’s
contributions to the attainment of those objectives. Such bonuses, if any, shall
be awarded and payable in accordance with management incentive plans of Parent
applicable to executive officers of the Company. The criteria for such bonus
shall be established from time to time by the Compensation Committee of the
Board of Directors of Parent based upon substantially the same criteria as
annual cash bonuses generally awarded to executive officers of the Parent, which
may take into account, among other things, intrinsic differences in job duties
and responsibilities. Any actual bonus award shall be in such amount and payable
in such manner, and otherwise be on such terms, as are determined by the
Compensation Committee of the Board of Directors of Parent.

Any provision to the contrary notwithstanding, the Company will make all
payments under this Section 4(d) not later than September 15 of the fiscal year
following the end of the fiscal year in which the payments are no longer subject
to a substantial risk of forfeiture; provided that if calculation of the payment
amount is not administratively practicable due to events beyond the Company’s
control or if the Company has insufficient funds so that such payment would
jeopardize the solvency of the Company, the payment may be delayed until the
first fiscal year in which the payment is administratively practicable and the
funds of the Company are sufficient.

(e) Stock Options. Executive shall be eligible to be considered for an annual
grant of stock options entitling the Executive to purchase shares of common
stock of Parent (“Options”) as may from time to time be approved by the
Compensation Committee of the board of directors of Parent. The criteria for
such awards shall be based upon substantially the same criteria as Option grants
generally awarded to subsidiary employees of Parent, which may take into account
intrinsic differences in job duties and responsibilities.

(f) Closing Stock Options Bonus. The chief executive officer of Parent will
recommend to the Compensation Committee of Parent that Executive be granted, as
of the date of this Agreement or at the next scheduled meeting of such
Compensation Committee, nonqualified stock options entitling Executive to
purchase that number of shares of common stock of Parent with exercise prices
and vesting terms as set forth on Exhibit B. Such stock options shall be awarded
pursuant to a stock option award agreement of Parent containing such terms as
are generally applicable to other subsidiary employees of the Parent, except as
may otherwise be provided in Exhibit B.

(g) Closing Cash Bonus. Upon the closing of the transactions contemplated by the
Stock Purchase Agreement, Executive will receive a cash bonus of $100,000 which
will be paid promptly after the closing of the transaction contemplated by the
Stock Purchase Agreement, but

 

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in no event shall such cash bonus be paid later than September 15 of the fiscal
year following the end of the fiscal year in which such transactions closed.

5. TERMINATION OF EMPLOYMENT.

Executive’s employment under this Agreement may be terminated under any of the
circumstances set forth in this Section 5:

(a) Death or Disability. Executive’s employment hereunder shall terminate
automatically upon Executive’s death. In such event, Executive’s estate shall be
entitled to receive any earned and unpaid Base Salary, prorated through the date
of death. If, in the judgment of the Board of Directors of Parent, Executive is
unable to engage in substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months; or, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident and health
plan covering employees of the Company or Parent (“Disabled” or “Disability”),
then Executive acknowledges that he would be unable to perform the essential
functions of his job and the Company may terminate the Executive’s employment
upon written notice to Executive. The date of Disability shall be the date
specified by the Board of Directors of the Company in the written notice
provided to Executive by the Company. In the event of termination due to
Disability, Executive shall be entitled to receive any earned and unpaid Base
Salary, prorated through the date of Disability. While receiving Disability
income payments under any Company or Parent Disability income plan, Executive
shall not be entitled to receive any Base Salary hereunder, but shall continue
to participate in the Company’s benefit plans, to the extent permitted by such
plans, until the termination of his employment. Termination of his employment
for Disability shall not restrict or limit the Executive’s opportunity to
receive continued benefits under the Company’s then existing Disability plans(s)
in accordance with and to the extent as may be provided by the terms of such
plan(s).

(b) Termination Without Cause. This Agreement may be terminated by Executive or
by the Company at any time, for any reason or without cause or reason, by giving
thirty (30) days prior written notice to the other party. In the event the
Company terminates Executive’s employment without “Cause” (other than due to
Executive’s death or Disability), then Executive shall be entitled to any earned
and unpaid Base Salary prorated through the date of termination and severance
pay in the form of continuation of payment of his annualized base salary for a
period equal to the remaining current term of the Agreement, which shall be paid
in accordance with the Company’s regularly scheduled payroll practices and
subject to any and all applicable taxes and statutory deductions.

(c) Termination For Cause. This Agreement may be immediately terminated by the
Company for “Cause” without notice at any time and without further obligation,
except for Base Salary earned through the date of termination, for any of the
following reasons: (i) fraud, misrepresentation, or dishonesty; (ii) indictment
or conviction of Executive for criminal acts or conduct or the entering by
Executive of a plea of “guilty”, “no contest”, or “nolo contendere” to any crime
involving dishonesty or moral turpitude; (iii) repeated (after notice)
inattention to or

 

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failure in any material respect to properly and adequately perform duties and
responsibilities assigned to Executive by the Company, such performance to be
judged in the Board of Directors of the Company’s discretion; (iv) substance
abuse or intentional misconduct; or (v) the engaging by Executive in any act or
activity prohibited under the terms of this Agreement which is not discontinued
and the effects thereof cured to the satisfaction of the Company and Parent
within 10 days after notice thereof from the Company or Parent.

(d) Delay in Payments. Any provision in this Agreement to the contrary
notwithstanding, if Executive is a “specified employee” within the meaning of
Section 409A of the Internal Revenue Code (“Code”), any cash or in-kind payments
which constitute a “deferral of compensation” under Code Section 409A and which
would otherwise become due under this Agreement during the first six (6) months
(or such longer period as required by Code Section 409A) after termination of
the Executive’s employment for reasons other than death or Disability shall be
delayed and all such delayed payments shall be paid in full in the seventh
(7th) month after the date of termination of employment, and all subsequent
payments shall be paid in accordance with their original payment schedule. To
the extent that any insurance premiums or other benefit contributions
constituting a “deferral of compensation” become subject to the above delay,
Executive shall be responsible for paying such amounts directly to the insurer
or other third party and shall receive reimbursement from the Company for such
amounts in the seventh (7th) month as described above. The above delay shall not
apply to any payments that are excepted from coverage by Code Section 409A, such
as those payments covered by the short-term deferral exception described in
Treasury Regulations Section 1.409A-1(b)(4).

(e) Definition of Termination. “Termination of employment” and “termination” as
used in this Agreement to determine the date of any payment, shall mean the date
of the Executive’s “separation from service” as defined by Code Section 409A.

6. RESTRICTIVE COVENANTS.

(a) Confidentiality. Executive acknowledges that the Company through the
Subsidiary and otherwise is engaged in the Home Care Business as more fully
defined and set forth on Exhibit C. Executive further acknowledges that in order
to conduct the Home Care Business, the Company and its Affiliates own and use
Confidential Information (as hereinafter defined) as well as trade secrets.
Executive agrees that, both during and after termination of his employment for
any reason, Executive will hold in a fiduciary capacity for the benefit of the
Company and its Affiliates, and shall not, without the prior written consent of
Parent and the Company, directly or indirectly use (for his own benefit or for
the benefit of any other person or entity) or disclose, except as authorized by
the Company in connection with the performance of Executive’s duties, any
Confidential Information, as defined hereinafter, that Executive may have or
acquire (whether or not developed or compiled by Executive and whether or not
Executive has been authorized to have access to such Confidential Information)
during the term of, or in connection with, his employment. The term
“Confidential Information” as used in this Agreement shall mean and include any
information, data and know-how relating to the business of the Company that is
disclosed to Executive by the Company or known by him as a result of his
relationship with the Company and not generally within the public domain
(whether constituting a trade secret or not), including without limitation, the
following information:

 

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(i) financial information, such as the earnings, assets, debts, prices, fee
structures, volumes of purchases or sales or other financial data of the Company
and its Affiliates, whether relating to Company or its Affiliates generally, or
to particular products, services, geographic areas, or time periods;

(ii) supply and service information, such as information concerning the goods
and services utilized or purchased by the Company or its Affiliates, the names
or addresses of suppliers, terms of supply or service contracts, or of
particular transactions, or related information about potential suppliers, to
the extent that such information is not generally known to the public, and to
the extent that the combination of suppliers or use of a particular supplier,
though generally known or available, yields advantages to Company or its
Affiliates, the details of which are not generally known;

(iii) marketing information, such as details about ongoing or proposed marketing
programs or agreements by or on behalf of Company or its Affiliates, marketing
forecasts or results of marketing efforts or information about impending
transactions;

(iv) personnel information, such as Executives’ personal or medical histories,
compensation or other terms of employment, actual or proposed promotions,
hirings, resignations, disciplinary actions, terminations or reasons therefore,
training methods, performance, or other Executive information;

(v) customer information, such as any compilation of past, existing or
prospective customers, customer proposals or agreements between customers and
the Company or its Affiliates, status of customer accounts or credit, or related
information about actual or prospective customers; and

(vi) information provided to the Company or its Affiliates by a third party
under an obligation of confidentiality.

The term “Confidential Information” does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or its
Affiliates or the customer to which such information pertains; or information
already known to Executive at the time of such disclosure to him and under
circumstances where Executive had no other duty of confidentiality to the
Company or its Affiliates or third parties with respect to the disclosed
information, if such pre-existing knowledge is documented by a written, dated
record in Executive’s possession before the date of the disclosure of
Confidential Information to Executive; or subsequently received by Executive in
good faith from a third party having the prior right to make such disclosure and
authorize its public disclosure.

The covenants contained in this Section 6 shall survive the termination of
Executive’s employment with the Company for any reason for a period of two
(2) years; provided, however, that with respect to those items of Confidential
Information which constitute a trade secret under applicable law, the
Executive’s obligations of confidentiality and non-disclosure as set forth in
this Section 6 shall continue to survive after said two (2) year period to the
greatest extent

 

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permitted by applicable law. These rights of the Company and its Affiliates are
in addition to those rights the Company or its Affiliates have under the common
law or applicable statutes for the protection of trade secrets.

(b) Non-Solicitation: Employees or Sales Representatives. During the Executive’s
employment and for two (2) years immediately following cessation of Executive’s
employment with the Company for any reason, Executive will not solicit or in any
manner encourage employees of the Company or Parent or their respective
Affiliates to leave the employ of the Company. The foregoing prohibition applies
only to employees with whom Executive had Material Contact pursuant to
Executive’s duties during the twelve (12) month period immediately preceding
cessation of Executive’s employment with the Company. “Material Contact” under
this subsection means interaction between the Executive and another employee of
the Company or Parent or their respective Affiliates: (i) with whom Executive
actually dealt; or (ii) whose employment or dealings with the Company or Parent
or their respective Affiliates or services for the Company or Parent or their
respective Affiliates were handled, coordinated or supervised by the Executive.

(c) Non-Solicitation; Customers. During Executive’s employment and for two
(2) years immediately following cessation of Executive’s employment with the
Company for any reason, Executive shall not, on Executive’s own behalf or on
behalf of any Person (except the Company or Parent or their respective
Affiliates), solicit any customer of the Company or Parent or their respective
Affiliates, or any representative of any customer of the Company with a view to
selling or providing any product, equipment or service competitive with any
product, equipment or service sold or provided by the Company in the Home Care
Business during the twelve (12) month period immediately preceding cessation of
Executive’s employment with the Company; provided that the restrictions set
forth in this section shall apply only to customers of the Company or Parent or
their respective Affiliates, or representatives of customers of the Company or
Parent or their respective Affiliates with whom Executive had Material Contact
during such twelve (12) month period. “Material Contact” under this subsection
exists between Executive and each of the customers of the Company or of the
Parent or of their respective Affiliates: (i) with whom Executive actually dealt
for a business purpose while employed by the Company or to further a business
relationship between the customer and the Company or Parent or their respective
Affiliates, including, without limitation, those customers and potential
customers to which the Company or Parent or their respective Affiliates have
submitted a proposal to provide products or services as to which Executive had
material involvement; (ii) whose dealings with the Company or Parent or their
respective Affiliates were handled, coordinated or supervised by Executive; or
(iii) about whom Executive obtains or has obtained Confidential Information in
the ordinary course of business as a result of Executive’s association with the
Company or Parent or their respective Affiliates; or (iv) as to any customer
which receives or has received products or services from the Company or Parent
or their respective Affiliates, the sale or provision of which results, or has
resulted, in earnings or income being included in the calculation of any
performance based compensation of Executive.

(d) Non-Compete. Executive shall comply with the non-compete covenant set forth
in Exhibit C hereto.

 

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(e) Survival; Tolling of Period of Restraint. Notwithstanding the termination of
this Agreement, Executive hereby expressly agrees that (i) the provisions
contained in this Section 6 shall survive for the periods necessary to give
effect to the provisions thereof, and (ii) any purported violation of the
restraints set forth in this Section 6 shall automatically toll and suspend the
period of the restraint and extend the term of this Agreement for the amount of
time from the date Executive or Company or an Affiliate commences litigation
with respect to the enforceability of such provisions and/or such purported
violation until a final, non-appealable decision is rendered or the parties
otherwise resolve the purported violation; provided that the applicable period
of restraint shall not be extended unless there shall have been a violation of
the restraints set forth in the applicable section at issue during such period
of time.

(f) Acknowledgements Executive hereby acknowledges and agrees that the
restrictions contained in Section 6 and Exhibit C are fair and reasonable and
necessary for the protection of legitimate business interests of the Company,
Parent and their respective Affiliates. Executive acknowledges that in the event
the Executive’s employment with the Company terminates for any reason, the
Executive will be able to earn a livelihood without violating the restrictions
contained in Section 6 and Exhibit C and that the Executive’s ability to earn a
livelihood without violating such restrictions is a material condition to the
Executive’s employment and continued employment with the Company.

7. NON-DISPARAGEMENT.

Executive covenants and agrees that during the course of his employment by the
Company or at any time thereafter during which Executive is receiving payments
or other benefits of any kind from the Company or Parent or their respective
Affiliates, Executive shall not, directly or indirectly, in public or private,
deprecate, impugn, disparage, or make any remarks that would tend to or be
construed to tend to defame the Company or Parent or their respective Affiliates
or any of their employees, members of their board of directors or agents, nor
shall Executive assist any other Person, in so doing.

8. CONFLICT OF INTEREST.

Executive may not use his position, influence, knowledge of confidential
information or the Company assets for personal gain. A direct or indirect
financial interest, including joint ventures in or with a supplier, vendor,
customer or prospective customer without disclosure and written approval from
the Board is strictly prohibited and constitutes Cause for dismissal.

9. ENFORCEMENT OF COVENANTS.

(a) Termination of Employment and Forfeiture of Compensation. Executive agrees
that in the event that the Company determines that he has breached any of the
covenants set forth in Section 6 above during his employment, the Company shall
have the right to terminate his employment for Cause.

(b) Injunctive Relief. Executive understands, acknowledges and agrees that in
the event of a breach or threatened breach of any of the covenants and promises
contained in this Agreement, the Company, Parent and one or more of their
respective Affiliates will suffer irreparable injury for which there is no
adequate remedy at law and the Company, Parent and one

 

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or more of their respective Affiliates will therefore be entitled to obtain,
without bond, injunctive relief enjoining said breach or threatened breach. The
Executive further acknowledges, however, that the Company, Parent and one or
more of their respective Affiliates shall have the right to seek a remedy at law
as well as or in lieu of equitable relief in the event of any such breach.

(c) Executive’s Obligations Upon Termination. Upon the termination of
Executive’s employment hereunder for whatever reason, Executive shall
automatically tender Executive’s resignation from any office Executive may hold
with the Company, Parent or their respective Affiliates (whether as an officer,
director or otherwise), and Executive shall not at any time thereafter represent
himself to be connected or to have any connection with the Company, Parent or
any of their respective Affiliates.

10. WITHHOLDING OF TAXES.

The Company, Parent and their respective Affiliates shall withhold from any
compensation and benefits payable under this Agreement all applicable federal,
state, local, or other taxes. To the extent that the Company determines that any
compensation or benefits cannot be used to satisfy any such withholding
obligation, Executive agrees to promptly satisfy such withholding by providing a
check for any shortfall to the Company or its designee.

11. ARBITRATION.

All claims, disputes or controversies arising out of or relating to Executive’s
employment or cessation of employment with the Company, benefits provided by
Parent or their respective Affiliates or this Agreement, or the breach thereof
(including, without limitation, any claim that any provision of this Agreement
or any obligation of Executive is illegal or otherwise unenforceable or voidable
under law, ordinance or ruling or that Executive’s employment by the Company was
illegally terminated) shall be settled exclusively by final and binding
arbitration before a neutral arbitrator through arbitration administrated by the
American Arbitration Association under its National Rules for the Resolution of
Employment Disputes, and judgment upon the award rendered by the arbitrator may
be entered by any court having competent jurisdiction thereof, with costs of the
arbitration proceeding and the arbitrator’s fees to borne by the Company. By way
of example only, such claims include claims under federal, state, and local
statutory or common law, such as the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, as amended, including the amendments of the
Civil Rights Act of 1991, the Americans with Disabilities Act, and contract and
tort laws. Any payments which would otherwise become due under this Agreement
that are the subject of a dispute may be delayed to the extent permitted under
Section 409A of the Internal Revenue Code. The Company and Executive each
consents and submits to the personal jurisdiction and venue of the trial courts
of Cobb County, Georgia, and also to the personal jurisdiction and venue of the
United States District Court for the Northern District of Georgia for purposes
of enforcing this provision. All awards of the arbitration shall be binding and
non-appealable except as otherwise provided in the United States Arbitration
Act. Judgment upon the award of the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator shall have the authority to order
and award, among other things, specific performance of any obligation created
under this Agreement, the issuance of an injunction or other provisional relief,
or the imposition of sanctions for abuse or frustration of the arbitration
process. The parties shall be entitled to

 

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engage in reasonable discovery, including a request for the production of
relevant documents. Depositions may be ordered by the arbitrator upon a showing
of need. The foregoing provisions shall not preclude the Company from bringing
an action in any court of competent jurisdiction for injunctive or other
provisional relief as the Company may determine is necessary or appropriate.
This Section must be initialed below by Executive and on behalf of the Company.

 

 

 

  

         

  

 

              Executive    Company                           
Date                                            

12. NO CLAIM AGAINST ASSETS.

Nothing in this Agreement shall be construed as giving Executive any claim
against any specific assets of the Company or Parent or any of their respective
Affiliates or as imposing any trustee relationship upon the Company or Parent or
any of their respective Affiliates in respect of Executive. Neither the Company
nor the Parent nor any of their respective Affiliates shall be required to
establish a special or separate fund or to segregate any of its assets in order
to provide for the satisfaction of any obligations under this Agreement.
Executive’s rights under this Agreement shall be limited to those of an
unsecured general creditor of the Company.

13. SUCCESSORS AND ASSIGNMENT.

Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns. The rights and benefits of
Executive under this Agreement are personal to him and no such right or benefit
shall be subject to voluntary or involuntary alienation, assignment or transfer;
provided, however, that nothing in this Section 13 shall preclude Executive from
designating a beneficiary or beneficiaries to receive any benefit payable on his
death.

14. ENTIRE AGREEMENT; AMENDMENT.

This Agreement shall supersede any and all existing oral or written agreements,
representations, or warranties between Executive and the Company, Parent or any
of their subsidiaries or Affiliates relating to the terms of Executive’s
employment, including benefits with respect thereto. It may not be amended
except by a written agreement signed by both Executive and the Company.

15. GOVERNING LAW.

This Agreement has been executed and delivered in, and shall be governed by and
construed in accordance with the domestic substantive laws of, the State of
Georgia, without giving effect to any conflicts or choice of laws rule or
provision that would result in the application of the domestic substantive laws
of any other jurisdiction. Employee acknowledges and agrees that the foregoing
shall apply regardless of the office or location where he may be employed by the
Company from time to time.

 

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16. NOTICES.

Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by confirmed facsimile or confirmed electronic mail or by hand
delivery, to those listed below at their following respective addresses or at
such other address as each may specify by notice to the others:

 

To the Company:      

c/o SunLink Health Systems, Inc.

900 Circle 75 Parkway

Suite 1120

Atlanta, Georgia 30339

Attn: Robert M. Thornton, Jr.

President and Chief Executive Officer

Telephone No.: (770) 933-7000

Telecopy No.: (770) 933-7010

To Executive: At the address set forth on the signature page of this Agreement

17. MISCELLANEOUS.

(a) Waiver. The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver thereof or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

(b) Assistance in Litigation. Executive shall, upon reasonable notice, furnish
such information and assistance to the Company as may reasonably be required by
the Company or Parent or any of their respective Affiliates in connection with
any litigation in which it is, or may become, a party, and which arises out of
facts and circumstances known to Executive. During the Employment Term and
during the period, if any, during which he receives compensation from the
Company following the Employment Term, the Company shall promptly reimburse
Executive for his out-of-pocket expenses incurred in connection with the
fulfillment of his obligations under this Section and if Executive is no longer
employed by Company or then receiving compensation from the Company hereunder,
the Executive shall be reimbursed by the Company for Executive’s time at a rate
established by the Company comparable to the rate earned by Executive during his
Employment Term.

(c) Severability. The parties covenant and agree that the provisions contained
herein are reasonable and are not known or believed to be in violation of any
federal, state, or local law, rule or regulation. Except as noted below, should
any provision of this Agreement be declared or determined by any court of
competent jurisdiction to be unenforceable or invalid for any reason, the
validity of the remaining parts, terms or provisions of this Agreement shall not
be affected

 

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thereby and the invalid or unenforceable part, term or provision shall be deemed
not to be a part of this Agreement.

(d) Headings. Section headings are used herein for convenience of reference only
and shall not affect the meaning of any provision of this Agreement.

(e) Rules of Construction. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.

(f) Counterparts. This Agreement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, and such
counterparts will together constitute but one Agreement.

(g) Null and Void. This Agreement shall be null and void and of no force and
effect in the event the Stock Purchase Agreement is terminated other than in
connection with the consummation of the transactions contemplated thereby.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year set forth below.

 

SUNLINK HOMECARE SERVICES, LLC By:   Name:   Title:   Date:    

 

EXECUTIVE:

  George D. Shaunnessy Date:   Address:

 

 

Fax Number:   E-Mail Address:    

 

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EXHIBIT A

JOB TITLE: President of the Company

Reports to the Board of Directors of Company and to the chief executive officer
of Parent.

POSITION SUMMARY:

ESSENTIAL RESPONSIBILITIES:

 

  •  

Scope of responsibilities, duties, authority as defined from time to time by the
Board of Directors of the Company or the chief executive officer of the Parent.

 

  •  

Responsible for managing activities with respect to (i) identification and
acquisition of additional home infusion, pharmacy, home health care and other
similar or comparable businesses, (ii) general management of the Company
including overall management of (A) the operations and personnel of the Company
and the Subsidiary, (B) the marketing, sale and provision of home care services
and (C) the acquisition, development, distribution, marketing and sale of drugs
and/or similar products in connection with the Home Care Business. In addition
to his duties with respect to the foregoing, Executive will have such other
responsibilities as may be delegated to him from time to time by the chief
executive officer or board of directors of the Parent (collectively the
“Additional Duties”).

 

  •  

Responsibility for hiring and firing of non-executive personnel engaged in
business of the Company and the Subsidiary.

 

  •  

Exercises discretionary authority only as authorized by either the Board of
Directors, the chief executive officer of Parent or the board of directors of
the Parent.

LIMITATIONS ON AUTHORITY

Notwithstanding anything in this Agreement to the contrary, Executive shall not,
without the prior specific approval of either the Board of Directors of the
Company, the chief executive officer of Parent or the board of directors of the
Parent, take any of the following actions:

(i) hire or fire any officer or executive employee of the Company or the
Subsidiary;

(ii) adjust upward or downward any annual, long-term or other compensation of
any officer or executive employee of the Company or the Subsidiary;

(iii) enter into any agreement requiring the Company or the Subsidiary to make
payments or to provide goods or services except (A) sale of inventory or
provision of services in the ordinary course of business in accordance with the
policies of the Company or the Subsidiary or (B) as may be specifically approved
by either the chief executive officer of Parent or the board of directors of
Parent;

 

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(iv) enter into any loan agreement or other credit arrangement;

(v) enter into any agreement to sell, lease, or otherwise dispose of any of the
assets of the Company or the Subsidiary except the sale of inventory in the
ordinary course of business;

(vi) enter into any agreement to acquire, purchase, lease or otherwise obtain
any assets on behalf of the Company except (A) inventory in the ordinary course
of business or (B) as approved by either the chief executive officer of Parent
or the board of directors of Parent;

(vii) institute any business activities that are not (A) normally considered a
part of the Home Care Business or (B) specifically contemplated by the
Additional Duties;

(viii) discontinue any business activities that are normally considered a part
of the Home Care Business or Executive’s Additional Duties;

(ix) authorize the filing of any petition for relief on behalf of the Company or
the Subsidiary in any bankruptcy or insolvency proceeding or file or bring any
litigation on behalf of the Company or the Subsidiary;

(x) amend or terminate any agreement entered into by the company or the
Subsidiary in connection with the Stock Purchase Agreement; or

(xi) take any other action contrary to the Company’s and Parent’s written
policies, including Code of Conduct.

 

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EXHIBIT B

Closing Stock Option Bonus*

 

A.    Type   

Vesting

  

Exercise Price

  

Number of Options

   NQSO    Immediately upon closing of the transactions contemplated by the
Stock Purchase Agreement    Fair market value as of the date of grant**   
40,000    NQSO    One third of the total number of Options set forth to the
right per year beginning upon the first anniversary of the date of grant    Fair
market value as of the date of grant    60,000 B.    Type   

Vesting

  

Exercise Price

  

Number of Options

   NQSO    One fifth of the total number of Options set forth to the right per
year beginning upon the first anniversary of the date of grant    Greater of (i)
fair market value at date of grant or (ii) $8.00 per share**    100,000

* All stock options will be issued under one or more of Parent’s equity
incentive plans, as in effect from time to time.

** In order to comply with Section 409A of the IRC, the exercise price for an
option may never be less than the fair market value of the stock at the date of
grant.

 

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EXHIBIT C

 

(a) Non-Competition.

(i) During the term of this Agreement, and for a period equal to the longer of
any period during which Executive shall continue to receive compensation or
other remuneration (including any severance benefits payments from the Company),
or two (2) years after termination of this Agreement for any reason, Executive
agrees not to engage in any Competitive Activity within the Non-Compete
Territory.

(ii) Executive acknowledges and agrees, based upon the nature of the Company’s
business and its current activities, that the Non-Compete Territory as of the
date of this Agreement currently consists of the following Parishes in the State
of Louisiana: Lafayette, Jeff Davis, Acadia, Calcasieu, Vermillion, Beauregard,
and St. Landry and in the States of North Carolina, South Carolina, Georgia,
Florida, Alabama, Mississippi, Tennessee, Kentucky, Arkansas and Missouri where
Executive has or has had, or Executive is anticipated to have, Material Contact
on behalf of the Company or Parent during the term of the Agreement; provided,
however, that at the time of determination, the scope of the Non-Compete
Territory shall be reduced to the Executivecentric Non-Compete Territory.

 

(b) Additional Definitions.

For purposes of the Agreement and this Exhibit C, the Agreement shall have the
following additional definitions:

(i) “Affiliate” means Parent, any direct or indirect subsidiary of Parent or the
Company and any person or entity under control of, or under common control with,
Parent or Company or otherwise an “affiliate” of Company or Parent within the
meaning of the Securities Exchange Act of 1934, as amended to date.

(ii) “Competitive Activity” means any activity in which the Executive directly
or indirectly owns, manages, operates, controls, is employed by in a sales,
executive, managerial, business development or business technology capacity
(whether as an employee or independent contractor) or participates in the
ownership, management, operation or control of, any business (a “Competitor”)
that is engaged, either directly or indirectly, in the provision of services or
products which are part of the Home Care Business to any Healthcare Entity.

(iii) “Healthcare Entity” means a pharmacy, nursing home, hospice, hospital,
outpatient or ambulatory surgery or diagnostic center, physician’s office,
physician’s clinic, assisted living center or rehabilitation center.

(ii) “Home Care Business” means the provision of home infusion or home health
and related services and the sourcing, distribution, and sale of prescription
drugs, healthcare products or equipment to any Person or Healthcare Entity.

 

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(v) “Material Contact” solely for purposes of this Exhibit C means communication
between Executive and each customer or potential customer: (i) with whom
Executive dealt, including, without limitation, those customers and potential
customers to which the Company or Parent, or any of their respective Affiliates,
have submitted a proposal to provide services or products as to which Executive
had material involvement; (ii) whose dealings with the Company or Parent or any
of their respective Affiliates were coordinated or supervised by Executive;
(iii) about whom Executive obtained Confidential Information in the ordinary
course of business as a result of Executive’s association with the Company or
Parent or any of their respective Affiliates; or who receives services or
products authorized by the Company or Parent or any of t their respective
Affiliates, the sale or provision of which results or resulted in earnings or
income being included in any performance based compensation of Executive.

(vi) “Executivecentric Non-Compete Territory” means (i) during the term of this
Agreement any parish in the State of Louisiana specified in Clause
(a) (ii) above and any other geographic area outside the State of Louisiana in
which the Company, Parent or any of their respective Affiliates has business or
operations which will be performed, supervised by or assisted in by Executive
during the term of this Agreement, or in which the Company, Parent or any of
their respective Affiliates has customers or has actively sought prospective
customers, in each case, with whom Executive has Material Contact while employed
by the Company; and (ii) thereafter means any parish in the State of Louisiana
specified in Clause (a) (ii) above and any other geographical area outside the
State of Louisiana in which the Company, Parent or any of their respective
Affiliates continues to have business or operations or previously had business
or operations as of the date of this Agreement which were performed, supervised
by or assisted in by Executive, or in which the Company, Parent or any of their
respective Affiliates has customers or has actively sought prospective customers
as of the date of this Agreement, in each case, with whom Executive had Material
Contact while employed by the Company.

(vii) “Person” means an individual, corporation, partnership, association,
trust, business trust, limited liability company, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated authority,
governmental entity or other form of entity or group.

 

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