Item 1.01 Entry into a Material Definitive Agreement

On July 2, 2012, SunLink Health Systems, Inc. ("SunLink" or the "Company") and its HealthMont of Georgia, Inc. subsidiary completed its previously announced sale of substantially of all the assets of the Company's owned Memorial Hospital of Adel and Memorial Convalescent Center ("Memorial") to Hospital Authority of Tift County, Georgia ("Buyer") for approximately $8.35 million.

As previously disclosed in a Current Report on Form 8-K filed by the Company with the SEC on March 13, 2012, SunLink and its HealthMont of Georgia, Inc. subsidiary entered into an Asset Purchase Agreement by and among HealthMont of Georgia, Inc., SunLink and the Buyer on March 8, 2012, effective as of March 1, 2012, to sell substantially all of the assets of the Company's owned Memorial Hospital of Adel and Memorial Convalescent Center ("Memorial") to the Buyer for approximately $8.35 million. Excluded Assets include Accounts Receivable as of the Cutoff Date and all Medicare and Medicaid incentive payments ("EHR Funds") for meaningful use of electronic health record technology and all receivables, claims and settlements made pursuant to the Indigent Care Trust Fund of the State of Georgia ("ICTF") paid with respect to the State of Georgia's fiscal year ending June 30, 2012. Retained Liabilities generally consist of liabilities incurred prior to the closing date of the transaction.

The sale of assets of Memorial for approximately $8.35 million, less estimated sale expenses, resulted in net proceeds of approximately $7.5 million to the Company which were used to pay down senior debt under the Company's Credit Agreement.

Item 9.01 Financial Statements and Exhibits.

d. Exhibits. The following exhibits are filed with this report:

Exhibit 99.1 - SunLink Health Systems, Inc. Press Release dated July 2, 2012.

Exhibit 99.2 - Asset Purchase Agreement By and Among HealthMont of Georgia, Inc., SunLink Health Systems, Inc. and Hospital Authority of Tift County, Georgia as of March 1, 2012.