Document:

Form of Limited Consent Agreement

 Exhibit 10.26 
  
 RESIDENTIAL FUNDING COMPANY, LLC. 
 2711 N. Haskell Ave., Suite 900 
 Dallas, Texas 75204 
  
 May 3, 2007 
  
 The Parties Listed on Schedule “A” Attached Hereto 
 900 Circle 75 Parkway 
 Suite 1120 
 Atlanta, GA 30339 
 Attn: Mark J. Stockslager, Chief Financial Officer 
  

	 	Re:	 	Limited Consent 

  
 Gentlemen: 
  
 Reference is hereby made to that certain Credit Agreement, dated as of October 15, 2004, by and among SUNLINK HEALTH SYSTEMS, INC., a corporation
organized under the laws of the State of Ohio, SUNLINK HEALTHCARE LLC, a limited liability company organized under the laws of the State of Georgia, DEXTER HOSPITAL, LLC, a limited liability company organized under the laws of the State of Georgia,
CLANTON 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, SOUTHERN HEALTH CORPORATION OF
DAHLONEGA, INC., a corporation organized under the laws of the State of Georgia, SOUTHERN HEALTH CORPORATION OF HOUSTON, INC., a corporation organized under the laws of the State of Georgia, HEALTHMONT, INC., a corporation organized under the laws
of the State of Delaware, HEALTHMONT OF GEORGIA, INC., a corporation organized under the laws of the State of Tennessee, HEALTHMONT OF MISSOURI, 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, OPTIMA HEALTHCARE CORPORATION, a corporation organized under the laws of the State of Georgia, and KRUG PROPERTIES, INC., a corporation organized under the laws of the State of Ohio (individually, a “Borrower” and,
collectively, the “Borrowers”), and Residential Funding Company, LLC, a Delaware limited liability company (formerly known as Residential Funding Corporation) (the “Lender”) (as amended from time to time, the
“Loan Agreement”). Unless otherwise indicated, all terms used herein shall have the same meanings as in the Loan Agreement. 
  
 Borrowers have informed Lender of their intent to spend up to $8,000,000 in relation to a capital improvement program related to Chestatee Regional
Hospital, an outpatient diagnostic center in Dawsonville, Georgia and an outpatient diagnostic center in Dahlonega, Georgia (the “Excess Capital Expenditures”). Pursuant to Section 6.10 of the Loan Agreement, Borrowers may not
make, or permit any of its Subsidiaries to make, Capital Expenditures in excess of $5,000,000 on a consolidated basis in any fiscal year (“Maximum Annual Capital Expenditures”) 
  
  

 
and pursuant to Section 6.19 of the Loan Agreement Borrowers will not permit its Fixed Charge Coverage Ratio to be less than 1.10 to 1.00 for each
twelve (12) consecutive months ending on the last day of any fiscal quarter during the term of the Loan Agreement. In that regard, it is expected that the Excess Capital Expenditures will cause the Borrowers to exceed the Maximum Annual Capital
Expenditures and cause the Borrowers to breach the Fixed Charge Coverage Ratio covenant resulting in defaults under Section 7.1(e) of the Loan Agreement. Accordingly, the Borrowers are hereby requesting that the Lender consent to the
Excess Capital Expenditures and waive any and all such existing or prospective Defaults or Events of Default that may arise from the incurrence by the Borrowers of such Excess Capital Expenditures. 
  
 Lender hereby consents to the Excess Capital Expenditures and agrees that
Borrowers (i) shall be permitted to exclude the Excess Capital Expenditures from Capital Expenditures for purposes of the covenant in Section 6.10 of the Loan Agreement and (ii) shall not be required to deduct Excess Capital
Expenditures from Consolidated EBITDA in the calculation of the Fixed Charge Coverage Ratio. Furthermore, Lender agrees that no Default or Event of Default under Section 7.1 (e) of the Loan Agreement shall be deemed to occur solely
as a result of the incurrence of the Excess Capital Expenditures and hereby waives any existing or prospective Default or Event of Default that may arise from the breach of Sections 6.10 and 6.19 of the Loan Agreement as a result of
such expenditures, provided, however, that Lender’s consent is subject to the satisfaction of the following conditions: (i) Lender shall have received a copy of this letter agreement duly and validly executed by Borrowers,
(ii) no other Default or Event of Default shall have occurred and be continuing except as previously disclosed to Lender in writing, and (iii) the representations and warranties contained in the Loan Agreement and the other Loan Documents
shall be true and correct as of the date hereof as if made on the date hereof, except to the extent any such representation or warranty expressly relates to an earlier date. 
  
 Except as expressly set forth herein, all of the other terms, provisions and conditions of the Loan Agreement and the other
Loan Documents shall remain and continue in full force and effect and are hereby ratified and confirmed as so amended. 
  
 The limited consent set forth above shall not apply to any other past, present or future violation or violations from the referenced portions of the Loan
Agreement or any other provision of the Loan Agreement or any other Loan Document. Except as expressly agreed to herein, Lender’s failure to exercise any right, privilege or remedy as a result of the matters set forth above shall not directly
or indirectly in any way whatsoever: (a) impair, prejudice or otherwise adversely affect Lender’s right at any time to exercise any right, privilege, or remedy in connection with the Loan Agreement, the other Loan Documents, any other
agreement, or any other contract or instrument, (b) amend or alter any provision of the Loan Agreement, the other Loan Documents, any other agreement, or any other contract or instrument, or (c) constitute any course of dealing or other
basis for altering any obligation of any Borrower or any right, privilege, or remedy of Lender under the Loan Agreement, the other Loan Documents, any other agreement, or any other contract or instrument. Lender hereby reserves all rights granted
under the Loan Agreement, the other Loan Documents, this limited consent and any other contract or instrument between any Borrower and Lender. 
  
 In order to induce Lender to execute this limited consent, each Borrower accepts and agrees to each provision of this limited consent. 
  
  

 2 

 This limited consent may be executed in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement. This limited consent shall be a Loan Document for all purposes. 
  
 THIS LIMITED CONSENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN THAT STATE. 
  
 Borrowers hereby agree and
stipulate that the Borrowers, as of the date hereof, have no defenses, affirmative defenses, rights to offset to their performance or obligations, or counterclaims against the exercise of any of the rights or remedies of the Lender under the Loan
Documents or under applicable law. 
  
 Borrowers hereby absolutely
and unconditionally release and forever discharge Lender and any and all of its parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns, together with all of its present and former
directors, officers, agents and employees from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which the
Borrowers have had, now have or have made claim to have against any such party for or by reason of any act, omission, matter, cause or thing whatsoever arising under the Loan Documents from the beginning of time to and including the date of this
limited consent, whether such claims, demands and cause of action are matured or unmatured or known or unknown. 
  
 [Signature Pages Follow] 
  

 3 

			
	 Yours very truly,
  

 RESIDENTIAL FUNDING COMPANY, LLC

		
	By:	 	/s/ Angela D. Brown
	Name:	 	Angela D. Brown
	Title:	 	Sr. Vice President

  
  

			
	 Accepted and Agreed to by:
  
 SUNLINK HEALTH SYSTEMS, INC.
 As a
Borrower and Borrowers’ Agent

		
	By	 	/s/ Mark J. Stockslager
	 Name:
	 	Mark J. Stockslager
	 Title
	 	Interim Chief Financial Officer
	
	 SUNLINK HEALTHCARE, LLC
 As a
Borrower
 By its Sole Member SunLink Health Systems, Inc.

		
	By	 	/s/ Mark J. Stockslager
	 Name:
	 	Mark J. Stockslager
	 Title
	 	Vice President
	
	 DEXTER HOSPITAL, LLC
 As a
Borrower
 By its Sole Member SunLink Healthcare, LLC
  
 By its Sole Member SunLink Health Systems, Inc.

			
		
	 By
	 	/s/ Mark J. Stockslager
	 Name:
	 	Mark J. Stockslager
	 Title
	 	Interim Chief Financial Officer

			
	
	 CLANTON HOSPITAL, LLC
 As a
Borrower
 By its Sole Member SunLink Healthcare, LLC
  
 By its Sole Member SunLink Health Systems, Inc.

			
		
	 By
	 	/s/ Mark J. Stockslager
	 Name:
	 	Mark J. Stockslager
	 Title
	 	Interim Chief Financial Officer

			
	
	 SOUTHERN HEALTH CORPORATION OF ELLIJAY, INC.
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	 Name:
	 	Mark J. Stockslager
	 Title
	 	Asst. Secretary

  
  
  

			
	 SOUTHERN HEALTH CORPORATION OF
 DAHLONEGA,
INC.
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Asst. Secretary
	
	 SOUTHERN HEALTH CORPORATION OF HOUSTON, INC.
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Asst. Secretary
	
	 HEALTHMONT, INC.
 As a
Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Treasurer
	
	 HEALTHMONT OF GEORGIA, INC.
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Vice President
	
	 HEALTHMONT OF MISSOURI, INC.
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Vice President
	
	 HEALTHMONT, LLC
 As a Borrower
 By its Sole Member SunLink Health Systems, Inc.

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Interim Chief Financial Officer

			
	 HEALTHMONT OF MISSOURI, LLC
 As a Borrower
 By its Sole Member HealthMont, LLC

	
	 By its Sole Member SunLink Health Systems, Inc.

		
	 By
	 	/s/ Mark J. Stockslager
	 Name: 
	 	Mark J. Stockslager
	 Title 
	 	Interim Chief Financial Officer

			
	
	 SUNLINK SERVICES, INC.
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Asst. Secretary
	
	 OPTIMA HEALTHCARE CORPORATION
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Asst. Secretary
	
	 KRUG PROPERTIES, INC.
 As a Borrower

		
	By	 	/s/ Mark J. Stockslager
	Name:	 	Mark J. Stockslager
	Title	 	Treasurer

 SCHEDULE A 
  
 SUNLINK HEALTH SYSTEMS, INC. 
 SUNLINK HEALTHCARE LLC 
 DEXTER HOSPITAL, LLC 
 CLANTON HOSPITAL, LLC 
 SOUTHERN HEALTH CORPORATION OF ELLIJAY, INC. 
 SOUTHERN HEALTH CORPORATION OF DAHLONEGA,
INC. 
 SOUTHERN HEALTH CORPORATION OF HOUSTON. INC. 
 HEALTHMONT, INC. 
 HEALTHMONT OF GEORGIA, INC. 
 HEALTHMONT OF MISSOURI, INC. 
 HEALTHMONT, LLC 
 HEALTHMONT OF MISSOURI, LLC 
 SUNLINK SERVICES, INC. 
 OPTIMA HEALTHCARE CORPORATION 
 KRUG PROPERTIES, INC.Employment Letter

 Exhibit 10.27 
  

					
	 

	  	SUNLINK Healthcare Corp.	  	 900 Circle 75 Parkway, Suite 1300
 Atlanta, Georgia 30339
 770-933-7000
 770-933-7010 Fax
 www.sunlinkhealth.com

  
 PERSONAL AND
CONFIDENTIAL 
  
 September 30, 2002 
  
 Mr. Jack M. Spurr, Jr. 
 560 Ann Wilson Road 
 Sequatchie, TN 37374 
  
 Dear Jack:

  
 Please accept this as a formal offer of employment by SunLink Healthcare Corp.
(the “Company” or “SunLink”) effective October 1, 2002. As Vice President of Hospital Financial Operations of SunLink you will earn a salary of $8,333.33 per month or $100,000 on an annualized basis. While employed by
SunLink you will devote your full working time to your duties as assigned to you by the board of directors of SunLink and/or officers of the Company senior to you. Your salary will be re-evaluated at least annually to determine if any adjustments
should be made. In addition to your base salary you will have a target incentive opportunity for the fiscal year ending in June 2003 of up to 40% (forty percent) of your base salary based on criteria determined by the Board of Directors (the
“Board”) of SunLink Health Systems, Inc. (the “Corporation”). 
  
 You will also be eligible to participate in the Corporation’s stock option program. The amount, terms and timing of all grants under such stock option program will be discussed with you personally and are subject to the approval of the
Board. 
  
 As an employee you will be able to participate in the Company’s
medical/dental/life and disability programs effective January 1, 2003 (after 90 day waiting period). The Company supplements these benefits for your position so there will be no cost to you. For each full year of employment, you will earn
vacation leave equal to 15 (fifteen) days, which may be carried over for up to one year in accordance with the Corporation’s vacation policy. You will also be eligible to participate in the Corporation’s 401-k Retirement Plan at the next
open enrollment period following a 90-day waiting period (January 1, 2003). The Company currently has a discretionary match of 50 cents per dollar for each dollar contributed by you to the Plan of up to a maximum of 6% of your annual earnings.

  

 Jack M. Spurr, Jr. - Employment Letter 
 September 30, 2002 
 Page 2 of 2 
  
 The Company’s relocation
program will also be extended to you after your acceptance and signing of the attached Repayment Agreement (Exhibit A). The program covers the following: 
  

	 	•	 	 Cost of a full service move of household goods, excluding items of little value in proportion to the cost of moving. 

	 	•	 	 A lump sum payment to cover all other costs including temporary living, closing costs, pre-move travel, and house hunting equal to one month’s salary. Taxes
will be withheld and you will be responsible for proper reporting of relocation expenses on your income tax returns. 

  
 In consideration of the Company entering into this employment agreement, you agree to Non-Disclosure, No Denigration and Non-Competition undertakings with SunLink and
SunLink Health Systems, Inc. substantially as provided in the attached Exhibit B. 
  
 Jack, we are all excited about you joining SunLink Healthcare. 
  

									
	SUNLINK HEALTHCARE CORP.	 	 	 	 
					
	By:	 	/s/ Joseph T. Morris	 	 	 	Date: 	 	9-30-02
	 	 	 Joseph T. “Pete” Morris
	 	 	 	 	 	 
	 	 	 President and CFO
	 	 	 	 	 	 

  

									
	 ACCEPTED:
	 	 	 	 
					
	By:	 	/s/ Jack M. Spurr, Jr.	 	 	 	Date: 	 	9-30-02
	 	 	Jack M. Spurr, Jr.

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