Exhibit 10.29

NINTH MODIFICATION TO LOAN DOCUMENTS

THIS NINTH MODIFICATION TO LOAN DOCUMENTS (this “Modification Agreement”) is
entered into as of October 31, 2012, by and among SUNLINK HEALTH SYSTEMS, INC.,
a corporation organized under the laws of the State of Ohio (“SHSI”), SUNLINK
HEALTHCARE LLC, a limited liability company organized under the laws of the
State of Georgia (“SunLink Healthcare”), DEXTER HOSPITAL, LLC, a limited
liability company organized under the laws of the State of Georgia, SOUTHERN
HEALTH CORPORATION OF ELLIJAY, INC., a corporation organized under the laws of
the State of Georgia (“SHC Ellijay”), SOUTHERN HEALTH CORPORATION OF DAHLONEGA,
INC., a corporation organized under the laws of the State of Georgia (“SHC
Dahlonega”), SOUTHERN HEALTH CORPORATION OF HOUSTON, INC., a corporation
organized under the laws of the State of Georgia (“SHC Houston”), HEALTHMONT OF
GEORGIA, INC., a corporation organized under the laws of the State of Tennessee,
HEALTHMONT, LLC, a limited liability company organized under the laws of the
State of Georgia, HEALTHMONT OF MISSOURI, LLC, a limited liability company
organized under the laws of the State of Georgia, SUNLINK SERVICES, INC., a
corporation organized under the laws of the State of Georgia, SUNLINK SCRIPTSRX,
LLC (f/k/a SunLink Homecare Services, LLC), a limited liability company
organized under the laws of the State of Georgia, CENTRAL ALABAMA MEDICAL
ASSOCIATES, LLC, a limited liability company organized under the laws of the
State of Georgia, CASTLEMARK PROPERTIES, LLC (f/k/a Dahlonega Clinic, LLC), a
limited liability company organized under the laws of the State of Georgia
(“Castlemark”), CARMICHAEL’S CASHWAY PHARMACY, INC., a corporation organized
under the laws of Louisiana, CARMICHAEL’S NUTRITIONAL DISTRIBUTOR, INC., a
corporation organized under the laws of Louisiana, BREATH OF LIFE HOME HEALTH
EQUIPMENT, INC., a corporation organized under the laws of Louisiana, SUNLINK
HEALTHCARE PROFESSIONAL PROPERTY, LLC, a Georgia limited liability company
(“SHPP”) (each individually, a “Borrower” and, collectively, the “Borrowers”),
the other persons designated as “Credit Parties” on the signature pages hereof,
the financial institutions who are parties to this Modification Agreement as
Lenders (the “Lenders”), and CHATHAM CREDIT MANAGEMENT III, LLC, a Georgia
limited liability company (in its individual capacity “Chatham”), as Agent.

RECITALS

WHEREAS, the Agent, the Funding Agent, the financial institutions that are party
thereto as lenders, the Borrowers (other than SHPP), the other Credit Parties
are parties to that certain Amended and Restated Credit Agreement, dated as of
August 1, 2008 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”; unless otherwise defined
herein, capitalized terms used herein that are not otherwise defined herein
shall have the respective meanings assigned to such terms in the Credit
Agreement);

WHEREAS, Sunlink Healthcare has caused to be formed SHPP as a new Subsidiary for
the purpose of, among other things, acquiring and operating certain real estate
currently leased to SHC Ellijay, including a certain medical office building
located in Ellijay, Georgia, as more particularly described in Exhibit A
attached hereto (the “Medical Office”) pursuant to the exercise of a purchase
option held by SCH Ellijay which Medical Office concurrently will be purchased
by SHPP from SHC Ellijay (collectively, the “Medical Office Purchase”);

WHEREAS, SHPP expects to enter into a certain Loan Agreement with Pioneer Bank,
SSB (the “SHPP RDA Lender”), and certain other related instruments and
agreements on or about October 31, 2012 evidencing a term loan in a principal
amount of $2,100,000 (collectively, the “SHPP RDA Loan Transaction”) and intends
to use the proceeds of such term loan to finance the Medical Office Purchase,
pay for certain costs and expenses associate therewith and for working capital;

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WHEREAS, Sunlink and Sunlink Healthcare desire to guaranty the obligations of
SHPP under such loan facility with the SHPP RDA Lender (the “SHPP RDA Loan
Guarantees”);

WHEREAS, SHC Dahlonega desires to convey that certain vacant lot of
approximately two acres located in Dahlonega, Georgia (as more particularly
described in Exhibit B attached hereto, the “Dahlonega Lot”) to Castlemark (the
“Dahlonega Lot Transfer”);

WHEREAS, SunLink Healthcare desires to change its name to “MedCare South, LLC”
and SunLink Services desire to change its name to “MedCare Services, Inc.”
(collectively, the “Name Changes”); and

WHEREAS, the Borrowers are hereby requesting that the Agent and Lenders
(i) consent to the Option Exercise (as defined below), the Medical Office
Purchase, the SHPP RDA Loan Transaction, the SHPP RDA Guarantees, the Dahlonega
Lot Transfer, the Name Changes and certain other transactions described below
and (ii) agree to modify certain terms of the Credit Agreement and Pledge
Agreement, in each case, in accordance with the terms of this Modification
Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereto hereby agree as follows:

Section 1. Limited Consents.

(a) SHPP Transaction Consent. The Borrowers have advised the Agent and the
Lenders that SHPP desires to consummate the Medical Office Purchase, the SHPP
RDA Loan Transaction and certain other transactions described below and Sunlink
and Sunlink Healthcare desire to execute and deliver to the SHPP Lender the SHPP
RDA Loan Guarantees, as described in detail as follows: (a) SHC Ellijay will
exercise its option to purchase the Medical Office (the “Option Exercise”) and
purchase the Medical Office and concurrently SHPP, with the financing
concurrently provided by the SHPP RDA Loan Transaction, will acquire the Medical
Office from SHC Ellijay and SHC Ellijay will pay the consideration due the
seller under the Medical Office Purchase and consummate the Medical Office
Purchase, (b) SHC Ellijay concurrently with the extension of the SHPP RDA Loan
will transfer to SHPP certain equipment having a net book value of approximately
$120,000 as more fully described on Exhibit 1(a) hereto and requests that Agent
agree to release its Liens on such equipment effective upon such transfer
(collectively the “Equipment Transfer and Release”), (c) concurrently with the
Medical Office Purchase, SHPP will enter into a certain loan agreement with the
SHPP RDA Lender, together with a certain related promissory note evidencing
indebtedness in the original principal amount of $2,100,000; (d) concurrently
with the Medical Office Purchase, SunLink and SunLink Healthcare will enter into
the SHPP RDA Loan Guarantees in favor of the SHPP RDA Lender; and
(e) concurrently with the extension of the SHPP RDA Loan, SHPP will enter into a
security agreement, a deed of trust and certain other documents related thereto
(as in effect on the date hereof, the “SHPP RDA Security Documents”), pursuant
to which SHPP will grant a lien on and security interest in the assets and
property described in such SHPP RDA Security Documents as in effect on the date
hereof as “Collateral” and “Mortgaged Property” to and for the benefit of the
SHPP RDA Lender (such assets and property, the “SHPP RDA Collateral”).
Section 6.12 of the Credit Agreement prohibits the making of certain
Investments, including the purchase of real estate. Section 6.5 of the Credit
Agreement prohibits the creation of certain restrictions on the creation of
Liens or the payment of dividends and distributions. Sections 6.13, 6.14 and
6.15 of the Credit Agreement prohibit the incurrence of certain Indebtedness,
Liens, and Contingent Obligations (subject to enumerated exceptions), and
Section 6.2 of the Credit Agreement prohibits the assignment and other
conveyances of any property (subject to enumerated exceptions) of the Credit
Parties or their Subsidiaries. The Credit Parties request that the Agent and the

 

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Lenders consent to the Option Exercise, the Medical Office Purchase, the
Equipment Transfer and Release, the SHPP RDA Loan Transaction (including the
granting of security interests relating thereto) and the SHPP RDA Loan
Guarantees, notwithstanding the terms of Sections 6.2, 6.5, 6.12, 6.13, 6.14 and
6.15 of the Credit Agreement and the formation of SHPP (such consent, the
“Requested SHPP Transaction Consent”). Subject to the terms of this Modification
Agreement and satisfaction of each of the conditions to the Effective Date set
forth herein, the Agent and the Lenders hereby agree to the Requested SHPP
Transaction Consent.

(b) SHPP Deferral Consent. Section 5.14 of the Credit Agreement requires any new
Domestic Subsidiary to be joined as a Borrower (as defined in the Credit
Agreement) under the Credit Agreement and to execute such Loan Documents as the
Agent may request, including, without limitation, a Security Agreement and
Mortgage to secure all Obligations owing under the Loan Documents. The Credit
Parties request that the Agent and the Lenders agree to defer the obligations of
the Credit Parties to cause SHPP to comply with the requirements of Section 5.14
until January 2, 2013 (the “Requested SHPP Deferral Consent”). Subject to the
terms of this Modification Agreement and satisfaction of each of the conditions
to the Effective Date set forth herein, the Agent and the Lenders hereby agree
to the Requested SHPP Deferral Consent.

(c) Dahlonega Lot Transfer Consent. Section 6.2 of the Credit Agreement
prohibits the assignment and other conveyances of any property (subject to
enumerated exceptions) of the Credit Parties or their Subsidiaries. The Credit
Parties request that the Agent and the Lenders confirm that the Dahlonega Lot
Transfer constitutes a disposition permitted under the enumerated exceptions of
Section 6.2 of the Credit Agreement. Subject to the terms of this Modification
Agreement and satisfaction of each of the conditions to the Effective Date set
forth herein, the Agent and the Lenders hereby confirm that Dahlonega Lot
Transfer is permitted under the Credit Agreement.

(d) Name Change Consent. Subject to enumerated exceptions, Section 6.4 of the
Credit Agreement prohibits amendments to the organization documents of the
Credit Parties, and Section 6 of the Security Agreement prohibits name changes
for the Credit Parties without certain prior written notice. The Credit Parties
request that the Agent and the Required Lenders consent to the Name Changes.
Subject to the terms of this Modification Agreement and satisfaction of each of
the conditions to the Effective Date set forth herein, the Agent and the Lenders
hereby consent to the Name Changes.

Section 2. Changes to Credit Agreement and Pledge Agreement. Subject to the
satisfaction of the conditions to the Effective Date set forth in Section 3
herein, the Borrowers, the other Credit Parties, the Agent and the Lenders
hereby agree as follows:

(a) Section 1.1 of the Credit Agreement is revised by adding the following new
defined term in proper alphabetical order:

““RDA Loan Documents”: the HealthMont RDA Loan Documents, the SHC Houston RDA
Loan Documents and the SHPP RDA Loan Documents.”

““SHPP”: SunLink Healthcare Professional Property, LLC, a Georgia limited
liability company.”

““SHPP RDA Collateral”: has the definition ascribed to such term in that certain
Ninth Modification to Loan Documents dated as of October 31, 2012, among the
Borrowers, the Credit Parties, the Agent and the Lenders.”

““SHPP RDA Lender”: Pioneer Bank, SSB.”

 

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““SHPP RDA Loan”: that certain $2,100,000 term loan provided by the SHPP RDA
Lender to SHPP, and evidenced by the SHPP RDA Loan Documents.”

““SHPP RDA Loan Documents”: that certain Loan Agreement dated as of October 31,
2012, by and between SHPP and the SHPP RDA Lender together with all related
notes, security agreements, guarantees, documents, instruments, financing
statements, and deeds of trusts executed in connection therewith, as the same
may be amended or modified from time to time in accordance with Section 6.28 of
this Agreement.”

(b) A new Section 2.1(a)(iv) of the Credit Agreement is hereby added to read as
follows:

“(iv) Notwithstanding anything in this Agreement to the contrary, (A) from and
after July 1, 2012, each of the Borrowers and the Guarantors acknowledges and
agrees that HealthMont of Georgia, Inc. shall not be entitled to request or
receive any additional Advances under Section 2.1(a) from any of the Agent or
any Lender; provided, however, that nothing contained in this Section 2.1(a)(iv)
shall in any way diminish or limit any of the Obligations of HealthMont of
Georgia, Inc. in its capacity as a Borrower under this Agreement or any other
Loan Document and (B) each of the Borrowers and the Guarantors acknowledges and
agrees that SHPP shall not be entitled to request or receive any Advances under
Section 2.1(a) from any of the Agent or any Lender; provided, however, that
nothing contained in this Section 2.1(a)(iv) shall in any way diminish or
limit any of the Obligations of SHPP under any Loan Document to which it may
become a party from time to time.”

(c) Section 2.5(b) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“(b) The principal of the Term Loan shall be payable in equal installments of
One Hundred Sixty-Two Thousand One Hundred One Dollars and 45/100 cents
($162,101.45) on the first Business Day of each month.”

(d) Section 6.5 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“Section 6.5 Negative Pledges; Subsidiary Restrictions. Except as set forth in
the HealthMont RDA Loan Documents with respect to HealthMont of Missouri, LLC
and its Subsidiaries, the SHC Houston RDA Loan Documents with respect to
Southern Health Corporation of Houston, Inc. and SunLink Healthcare, L.L.C. (to
be known as MedCare South, LLC) and their respective Subsidiaries, and the SHPP
RDA Loan Documents with respect to SHPP, no Credit Party will, nor permit any
Subsidiary to, enter into any agreement, bond, note or other instrument with or
for the benefit of any Person other than the Agent and Lenders which would
(i) prohibit such Credit Party or such Subsidiary from granting, or otherwise
limit the ability of such Credit Party or such Subsidiary to grant, to the
Agent, for the benefit of the Beneficiaries, any Lien on any assets or
properties of such Credit Party or such Subsidiary, or (ii) require such Credit
Party or such Subsidiary to grant a Lien to any other Person if such Credit
Party or such Subsidiary grants any Lien to the Agent, for the benefit of the
beneficiaries. Except as set forth in the HealthMont RDA Loan Documents with
respect to HealthMont of Missouri, LLC and its Subsidiaries, except as set forth
herein and in the SHC Houston RDA Loan Documents with respect to Southern Health
Corporation of Houston, Inc. and SunLink Healthcare, L.L.C. and their respective
Subsidiaries, and except as set forth herein and in the SHPP RDA Loan Documents
with respect to SHPP, no Credit Party will permit any Subsidiary to place or
allow any restriction, directly or indirectly, on the ability of such Subsidiary
to (x) pay dividends or any distributions on or with respect to such
Subsidiary’s capital stock or (y) make loans or other cash payments to such
Credit Party.”

 

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(e) Section 6.7 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“Section 6.7 Transactions with Affiliates. No Credit Party will, nor permit any
Subsidiary to, enter into any transaction with any Affiliate of such Credit
Party except upon fair and reasonable terms no less favorable than such Credit
Party, or such Subsidiary, would obtain in a comparable arm’s-length transaction
with a Person not an Affiliate; provided, however, (i) subject to clause
(ii) below, the Credit Parties shall be permitted to (a) make the transfers,
distributions, payments or prepayments permitted under Section 6.6 hereof to its
Subsidiaries and Affiliates and (b) make loans to other Borrowers provided such
loans are evidenced by the Subordinated Intercompany Note and
(ii) notwithstanding anything to the contrary contained in this Agreement,
(y) on and after the occurrence of an Event of Default and during the
continuation thereof, no Credit Party will provide any intercompany loans to,
make any additional Investments of any kind in, or transfer any cash or other
assets to HealthMont of Missouri, LLC or SHPP and (z) except as set forth in the
proviso below with respect to intercompany loans, no Credit Party will make any
additional Investments of any kind in, or transfer any cash or other assets to
Southern Health Corporation of Houston, Inc. on or after the SHC Houston RDA
Loan First Advance Date or to SHPP (other than the sale of a medical office
building located in Ellijay Georgia and the substantially concurrent transfer of
certain equipment to SHPP) at any time; provided, that, any Credit Party may
make intercompany loans to Southern Health Corporation of Houston, Inc. on or
after the SHC Houston RDA Loan First Advance Date so long as immediately prior
to and upon giving effect to such intercompany loan (1) no Event of Default
shall have occurred or be continuing, (2) the Credit Parties shall be in pro
forma compliance with all the covenants set forth in Section 6.16, Section 6.17,
Section 6.18, Section 6.19, Section 6.20 and Section 6.21, and (3) the sum of
the Availability and the actual cash and Cash Equivalents of the Credit Parties
(excluding the actual cash and Cash Equivalents of Southern Health Corporation
of Houston, Inc.) shall not be less than $500,000.”

(f) Section 6.9 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“Section 6.9 Deposit and Other Accounts. No Credit Party will, nor permit any
Subsidiary to (a) establish any Deposit Accounts investment accounts or
securities accounts other than those described on Schedule 4.28, except for
Deposit Accounts, investment accounts or securities accounts as to which the
applicable Credit Party or Subsidiary(ies), as applicable, shall have delivered
to the Agent a Control Agreement in form and substance satisfactory to the Agent
(except in the case of any Local Bank Account as to which the applicable Credit
Party shall have delivered to the Agent a Local Bank Account Agreement in form
and substance satisfactory to the Agent), (b) violate directly or indirectly any
bank agency agreement, Control Agreement, Local Bank Account Agreement or other
agreement in favor of the Agent or (c) revoke or attempt to revoke any
instructions or directions given by it under any Control Agreement, Local Bank
Account Agreement or other agreement with respect to or altering the rights of
the Agent and Lenders thereunder, including, without limitation, attempting to
make any withdrawal from or requesting the reduction of funds on deposit in any
Local Bank Account without the prior written consent of the Agent; provided,
however, that (i) HealthMont of Missouri, LLC, may maintain an account or
accounts with the HealthMont RDA Lender that are not specifically listed on
Schedule 4.28 and are not

 

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subject to a Control Agreement as long as the HealthMont RDA Loan is outstanding
for the following purposes: (x) to hold proceeds of the delayed draw portion of
the HealthMont RDA Loan prior to such amounts being used for construction of
intended improvements on the Real Estate (as defined in the HealthMont RDA Loan
Documents), (y) to hold proceeds of HealthMont RDA Collateral prior to such
proceeds being used for reinvestment purposes, payments to the HealthMont RDA
Lender, or repairs, replacements, or restoration of any assets or property in
accordance with the terms of the HealthMont RDA Loan Documents, and/or (z) to
hold any funds related to taxes on the Real Estate (as defined in the HealthMont
RDA Loan Documents); (ii) Southern Health Corporation of Houston, Inc., may
maintain the following accounts with the SHC Houston RDA Lender that may or may
not be specifically listed on Schedule 4.28 and are not subject to a Control
Agreement as long as any SHC Houston RDA Loan is outstanding for the following
purposes: (v) account #5191883, to serve as the Construction Escrow Account
referred to in the SHC Houston RDA Loan Documents, (w) account #5191872, to
serve as the USDA Fee Account referred to in the SHC Houston RDA Loan Documents,
(x) account #5016499, to serve as the Medicare Account referred to in the SHC
Houston RDA Loan Documents, (y) account #5016488, to serve as the Operating
Account referred to in the SHC Houston Loan Documents, and (z) an account for
the purpose of holding any funds related to taxes on the Mortgaged Property (as
defined in the SHC Houston RDA Loan Documents); and (iii) SHPP may maintain an
account or accounts with the SHPP RDA Lender or one or more other banking
institutions that are not specifically listed on Schedule 4.28 and are not
subject to a Control Agreement for the following time periods and purposes:
(x) for as long as the SHPP RDA Loan is outstanding, to hold proceeds of SHPP
RDA Collateral prior to such proceeds being used for reinvestment purposes,
payments to the SHPP RDA Lender, or repairs, replacements, or restoration of any
assets or property in accordance with the terms of the SHPP RDA Loan Documents,
and/or (y) until January 2, 2013 (by which date such account shall be required
to be subject to a Control Agreement in form and substance satisfactory to the
Agent), an operating account to hold any funds related to payments of rents by
lessors or sublessors of the SHPP RDA Collateral or any portion thereof,
provided that, in each case, SHPP shall identify such accounts, the financial
institution with which they are maintained, and such other information as Agent
may request, to Agent in writing promptly after their creation;”

(g) A new Section 6.13(k) of the Credit Agreement is hereby added to read as
follows:

“(k) Indebtedness (including guarantees) relating to the SHPP RDA Loan and the
SHPP RDA Loan Documents owing by one or more Credit Parties to the SHPP RDA
Lender in an aggregate principal amount not to exceed $2,100,000 (less the
amount of all principal payments made in respect of the SHPP RDA Loan).”

(h) A new Section 6.14(n) of the Credit Agreement is hereby added to read as
follows:

“(n) Liens upon the SHPP RDA Collateral securing Indebtedness permitted by
Section 6.13(k).”

(i) Section 6.15 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“Section 6.15 Contingent Liabilities. No Credit Party will, nor permit any
Subsidiary to, be or become liable on any Contingent Obligations except
(a) Contingent Obligations existing on the date of this Agreement and disclosed
on Schedule 6.15; (b) Contingent Obligations of HealthMont, LLC and SHSI
relating to the HealthMont RDA Loan

 

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and the HealthMont RDA Loan Documents; (c) Contingent Obligations of Southern
Health Corporation of Houston, Inc., SHSI and SunLink Healthcare, L.L.C.
relating to the SHC Houston RDA Loans and the SHC Houston RDA Loan Documents;
(d) Contingent Obligations of SHPP, Sunlink Health Systems, Inc. and SunLink
Healthcare, L.L.C. relating to the SHPP RDA Loans and the SHPP RDA Loan
Documents and (e) Contingent Obligations for the benefit of the Agent and
Lenders.”

(j) Section 6.29 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“Section 6.29 Prepayments of HealthMont RDA Loan, SHC Houston RDA Mortgage Loan
and SHPP RDA Loan. No Credit Party shall, directly or indirectly, voluntarily
prepay any principal in respect of the HealthMont RDA Loan, the SHC Houston RDA
Mortgage Loan or the SHPP RDA Loan.”

(k) Schedule 5.16 of the Credit Agreement is hereby amended to add at the end
thereof the following new post-closing requirements:

“4. SHPP Loan Documents. On or prior to January 2, 2013, Credit Parties shall
cause SHPP to comply with each of the requirements set forth in Section 5.14 of
the Credit Agreement, including without limitation, causing SHPP to (a) be
joined as a Borrower under the Credit Agreement, a maker of each Note and a
“Grantor” under and as defined in the Security Agreement and (b) execute and
deliver a Mortgage and cause to be delivered a title insurance policy with
respect to the real property owned by SHPP, in each case, in form and substance
satisfactory to Agent, which Mortgage Lien may be subordinated in priority to
the Lien granted to SHPP RDA Lender in respect of the SHPP RDA Loan pursuant to
a lien subordination agreement substantially the form set forth as Exhibit
5.16(4) hereof. Each Credit Party agrees to execute and/or deliver such
additional documents, instruments and agreements as the Agent may reasonably
request in connection with the requirements of Section 5.14 with respect to
SHPP.

5. Notice of Name Changes. Within 5 days after changing the legal names of
“SunLink Healthcare, LLC” to “MedCare South, LLC” and “SunLink Services, Inc.”
to “MedCare Services, Inc.”, Credit Parties shall provide Agent with copies of
all amendments to such Credit Parties’ organization documents certified by the
relevant Governmental Authorities reflecting such name changes whereupon Agent
shall be entitled to file amendments to the relevant UCC-1 financing statements
of record to reflect such name changes.

6. Filing of Partial Assumption of Deed to Secure Debt. Concurrent with the
recordation of any deeds or other documents with the relevant Governmental
Authority necessary to convey fee title from Southern Health Corporation of
Dahlonega, Inc. to Castlemark Properties, LLC of a certain vacant lot of
approximately two acres located in Dahlonega, Georgia, the Credit Parties shall
cause to also be properly recorded with such relevant Governmental Authority a
partial assumption of deed to secure debt executed by Castlemark in form and
substance satisfactory to Agent and shall thereafter promptly cause to be
delivered to Agent a duly recorded, file stamped copy of such recorded
documents.”

(l) The Credit Agreement is hereby amended to add in proper order a new Exhibit
5.16(4) to the Credit Agreement in the form of Exhibit 5.16(4) attached hereto.

 

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(m) Schedule I to the Pledge Agreement is hereby amended to add in proper order
the following new information relating to the pledge of the SHPP Equity
Interests:

 

“SunLink Healthcare, LLC (to be known as MedCare South, LLC)   

Stock Issuer: SunLink Healthcare Professional

Property, LLC

Percentage Ownership: 100%

Class of Interest: Membership Interest Units

Certificate No(s).: 1

Par Value: N/A

Number of Units: 100”

Section 3. Conditions Precedent. The terms of Section 1 and Section 2 of this
Modification Agreement shall become effective as of the date each of the
following conditions is satisfied (the “Effective Date”):

(a) The Agent shall have received duly executed counterparts to this
Modification Agreement from each of the Credit Parties, the Agent, and the
Required Lenders;

(b) The Agent shall have received (i) all original certificates representing
100% of the Equity Interests of SHPP together with undated powers executed in
blank, in form and substance acceptable to the Agent and (ii) a partial
assumption of deed to secure debt in the form attached hereto as Exhibit C
hereto;

(c) The SHPP RDA Loan Transaction and Medical Office Purchase shall have been
consummated and SHPP shall have received proceeds (net of all reasonable
transaction costs, expenses and holdbacks) from the loan in the principal amount
of $2,100,000 from the SHPP RDA Loan Transaction;

(d) The Agent and Lenders shall have received fully executed copies of the SHPP
RDA Loan Documents and any other documents relating to the SHPP RDA Loan
Transaction, which shall in each case be on terms and conditions reasonably
satisfactory to the Agent and the Lenders;

(e) The Agent shall have received payment of its reasonable legal fees and
out-of-pocket expenses arising from and relating to this Modification Agreement.

Section 4. Representations and Warranties. Each of the Credit Parties hereby
represents and warrants to the Agent and Lenders, which representations and
warranties shall survive the execution and delivery of this Modification
Agreement, that:

(a) All of the representations and warranties contained in Article IV of the
Credit Agreement shall be true and correct in all material respects (except with
respect to those representations and warranties which are qualified as to
materiality in which case such specific materiality qualifiers shall apply) on
the Effective Date, with the same force and effect as if made on such date,
unless such representation and warranty expressly applies to an earlier date, in
which case such representation and warranty shall be deemed made as of such
earlier date.

(b) The execution, delivery and performance by each Credit Party of this
Modification Agreement have been duly authorized by all necessary corporate
action by such Credit Party. This Modification Agreement constitutes the legal,
valid and binding obligations of each Credit Party executing the same,
enforceable against each Credit Party in accordance with its terms, subject to
limitations as to enforceability which might result from bankruptcy, insolvency,
moratorium and other similar laws affecting creditors’ rights generally and
subject to limitations on the availability of equitable remedies.

 

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(c) The execution, delivery and performance by each Credit Party of this
Modification Agreement will not (i) violate any provision of any law, statute,
rule or regulation or any order, writ, judgment, injunction, decree,
determination or award of any court, governmental agency or arbitrator presently
in effect having applicability to such Credit Party, (ii) violate or contravene
any provision of the Articles or Certificates of Incorporation or Formation,
bylaws, operating agreement or partnership agreement of such Credit Party, or
(iii) result in a breach of or constitute a default under any indenture, loan or
credit agreement or any other agreement, lease or instrument to which such
Credit Party is a party or by which it or any of its properties may be bound or
result in the creation of any Lien thereunder.

(d) No Default or Event of Default has occurred and is continuing.

(e) No order, consent, approval, license, authorization or validation of, or
filing, recording or registration with, or exemption by, any governmental or
public body or authority is required on the part of any Credit Party to
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
this Modification Agreement.

Section 5. Acknowledgment; Release. The Credit Parties acknowledge and agree
that their obligations to the Agent and the Lenders under the Credit Agreement
as revised hereby are owing without offset, defense or counterclaim assertable
by the Credit Parties against the Agent or any Lender. The Credit Parties
further acknowledge and agree that the Security Documents continue to secure the
obligations of the Borrowers under the Credit Agreement as revised hereby. Each
of the Credit Parties hereby waives, releases and discharges Agent, the Funding
Agent and Lenders from any and all claims, demands, actions or causes of action
arising out of or in any way relating to the Loans, the other Obligations, the
Loan Documents and/or any documents, agreements, dealings or other matters
connected with any of the foregoing including, without limitation, all known and
unknown matters, claims, transactions, or things occurring prior to the date of
this Modification Agreement related to the Loans, the other Obligations, the
Loan Documents and/or any documents, agreements, dealings or other matters
connected with any of the foregoing.

Section 6. General Provisions.

(a) Except as specifically revised or waived set forth above, the Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed. Each of the Credit Parties hereby confirms
its respective guarantees, pledges, grants of security interests and mortgages
and other obligations, as applicable, under and subject to the terms of each of
the other Loan Documents to which it is party, and agrees that, notwithstanding
the effectiveness of this Modification Agreement, such guarantees, pledges,
grants of security interests and mortgages and other obligations, and the terms
of each of the other Loan Documents to which it is a party, are not impaired or
affected in any manner whatsoever and shall continue to be in full force and
effect after giving effect to this Modification Agreement.

(b) The execution, delivery and effectiveness of this Modification Agreement
shall not operate as a waiver of any right, power or remedy of the Agent or any
Lender under the Credit Agreement or any other Loan Document, nor constitute
amendment of any provision of the Credit Agreement or any other Loan Document,
except as specifically set forth herein. Upon the Effective Date of this
Modification Agreement, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall
mean and be a reference to the Credit Agreement as revised hereby.

 

9

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(c) Each Credit Party acknowledges and agrees that the revisions, waivers and
consents set forth herein are effective solely for the purposes set forth herein
and shall not be deemed (i) except as expressly provided in this Modification
Agreement, to be a consent by the Agent or any Lender to any amendment, waiver
or modification of any term or condition of the Credit Agreement or of any other
Loan Document, (ii) to create a course of dealing or otherwise obligate the
Agent or Lenders to forbear, waive, consent or execute similar revisions or
waivers under the same or similar circumstances in the future, or (iii) to
amend, prejudice, relinquish or impair any right of the Agent or Lenders to
receive any indemnity or similar payment from any Person or entity as a result
of any matter arising from or relating to this Modification Agreement.

(d) This Modification Agreement may be executed in any number of counterparts,
each such counterpart constituting an original but all together one and the same
instrument. Any party delivering an executed counterpart of this Modification
Agreement by fax shall also deliver an original executed counterpart, but the
failure to do so shall not affect the validity, enforceability or binding effect
of this Modification Agreement.

(e) In case any provision in or obligation under this Modification Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

(f) This Modification Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.

(g) Without limiting the general applicability of Section 8.2 of the Credit
Agreement, the Credit Parties agree to reimburse the Agent for the reasonable
fees, costs and expenses of counsel in connection with the preparation,
negotiation, execution, delivery and administration of this Modification
Agreement.

(h) This Modification Agreement shall constitute a Loan Document.

(i) Section headings in this Modification Agreement are included herein for
convenience of reference only and shall not constitute a part of this
Modification Agreement for any other purposes.

(j) THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS MODIFICATION AGREEMENT
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF GEORGIA, WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

10

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IN WITNESS WHEREOF, the parties hereto have executed this Modification Agreement
as of the date first written above.

 

BORROWERS:

SUNLINK HEALTH SYSTEMS, INC.,

as a Borrower and Borrowers’ Agent

By:    

Name:    

Title:    

 

SUNLINK HEALTHCARE, LLC

(to be known as MedCare South, LLC),

as a Borrower

By its Sole Member SunLink Health Systems, Inc.

By:    

Name:    

Title:    

 

DEXTER HOSPITAL, LLC, as a Borrower By its Sole Member SunLink Healthcare, LLC  
By its Sole Member SunLink Health Systems, Inc.

          By:    

          Name:    

          Title:    

 

SOUTHERN HEALTH CORPORATION OF

ELLIJAY, INC.,

as a Borrower By:    

Name:    

Title:    

 

SOUTHERN HEALTH CORPORATION OF

DAHLONEGA, INC.,

as a Borrower By:    

Name:    

Title:    

--------------------------------------------------------------------------------

SOUTHERN HEALTH CORPORATION OF

HOUSTON, INC.,

as a Borrower

By:    

Name:    

Title:    

 

HEALTHMONT OF GEORGIA, INC.,

as a Borrower

By:    

Name:    

Title:    

 

HEALTHMONT, LLC,

as a Borrower

By its Sole Member SunLink Health Systems, Inc.

By:    

Name:    

Title:    

 

HEALTHMONT OF MISSOURI, LLC,

as a Borrower

By its Sole Member HealthMont, LLC   By its Sole Member SunLink Health Systems,
Inc.

          By:    

          Name:    

          Title:    

 

SUNLINK SERVICES, INC.

(to be known as MedCare Services, Inc.),

as a Borrower

By:    

Name:    

Title:    

--------------------------------------------------------------------------------

SUNLINK SCRIPTSRX, LLC

(f/k/a SunLink Homecare Services, LLC),

as a Borrower

By its sole member SunLink Health Systems, Inc.

By:    

Name:    

Title:    

 

CENTRAL ALABAMA MEDICAL ASSOCIATES, LLC,

as a Borrower

By its Sole Member SunLink Healthcare, LLC

  By its Sole Member SunLink Health Systems, Inc.

          By:    

          Name:    

          Title:    

 

CASTLEMARK PROPERTIES, LLC

(f/k/a Dahlonega Clinic, LLC),

as a Borrower

By its Sole Member Southern Health Corporation of

Dahlonega, Inc.

          By:    

          Name:    

          Title:    

 

CARMICHAEL’S CASHWAY PHARMACY, INC.,

as a Borrower

By:    

Name:    

Title:    

 

 

CARMICHAEL’S NUTRITIONAL DISTRIBUTOR,

INC.,

as a Borrower

By:    

Name:    

Title:    

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BREATH OF LIFE HOME HEALTH EQUIPMENT, INC.,

as a Borrower

By:    

Name:    

Title:    

 

SUNLINK HEALTHCARE PROFESSIONAL

PROPERTY, LLC

By its Sole Member SunLink Healthcare, LLC

  By its Sole Member SunLink Health Systems, Inc.

          By:    

          Name:    

          Title:    

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AGENT:

CHATHAM CREDIT MANAGEMENT III, LLC,

as Agent

By:    

Name:    

Title:    

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FUNDING AGENT:

CHATHAM CREDIT MANAGEMENT III, LLC,

as Funding Agent

By:    

Name:    

Title:    

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LENDERS:

CHATHAM CREDIT MANAGEMENT III, LLC,

not individually, but as agent for

CHATHAM INVESTMENT FUND QP III, LLC, as

a Lender and CHATHAM INVESTMENT

FUND III, LLC, as a Lender

By:    

Name:    

Title:    

 

CHATHAM CREDIT MANAGEMENT III, LLC,

not individually, but as agent for CHATHAM

CASCADE FUND III, LLC, as a Lender, and

CHATHAM CASCADE FUND QP III, LLC,

as a Lender

By:    

Name:    

Title:    

 

CHATHAM CAPITAL MANAGEMENT IV, LLC,

not individually, but as agent for

CHATHAM INVESTMENT FUND QP IV, LLC, as

a Lender, and CHATHAM INVESTMENT

FUND IV, LLC, as a Lender

By:    

Name:    

Title: