WQ0007026_Renewal Application_20220418

Initial Review
Reviewer Thornburg, Nathaniel D
Is this submittal an application? (Excluding additional information.)*
Yes No
Permit Number (IR) * WQ0007026
ApplicantlPermittee Sanford Health and Rehabilitation Co.
ApplicantlPermittee Address 2702 Farrell Rd.
Is the owner in BIMS? Yes NO Is the facility in BIMS? Yes No
Owner Type
Facility Name
County
Fee Category
Is this a complete application?*
Yes No
Signature Authority
Signature Authority Title
Signature Authority Email
Document Type (if non -application)
Email Notifications
Organization
Sanford Health and Rehabilitation WWTF
Lee
Does this need review by the hydrogeologist? * Yes NO
Regional Office
CO Reviewer
Admin Reviewer
Fee Amount
Complete App Date
$0
Below list any additional email address that need notification about a new project.
... ... ..
Email Address
Comments to be added to email notfication
Comments for Admin
Comments for RO

Comments for Reviewer
Comments for Applicant

Submittal Form
Project Contact Information
Please provide information on the person to be contacted by NDB Staff regarding electronic submittal, confirmation of receipt, and other correspondence.
............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Name* Chris Thomas
Email Address*
chris.thomas@macconnellandassoc.
com
Project Information
Application/Document Type*
New (Fee Required)
Modification - Major (Fee Required)
Renewal with Major Modification (Fee
Required)
Annual Report
Additional Information
Other
Phone Number*
9194671239
Modification - Minor
Renewal
GW-59, NDMR, NDMLR, NDAR-1,
N DAR-2
Residual Annual Report
Change of Ownership
We no longer accept these monitoring reports through this portal. Please click on the link below and it will take you to the correct form.
hftps://edocs.deq.nc.gov/Forms/NonDischarge_Monitoring_Report
Permit Type:*
Wastewater Irrigation
High -Rate Infiltration
Other Wastewater
Reclaimed Water
Closed -Loop Recycle
Residuals
Single -Family Residence Wastewater
Other
Irrigation
Permit Number: *
WQ0007026
Has Current Existing permit number
Applicant/Permittee*
Sanford Health and Rehabilitation Co.
Applicant/Permittee Address*
2702 Farrell Rd.
Facility Name*
Sanford Health and Rehabilitation WWTF
Please provide comments/notes on your current submittal below.
This is a permit renewal for permit number WQ0007026. The current system is a sand filter
and a lagoon for holding until irrigated using a surface spray method. No major modifications
have been done and all coordinates were GPS'd in.
At this time, paper copies are no longer required. If you have any questions about what is required, please contact Nathaniel Thornburg
at [e-mail].
Please attach all information required or requested for this submittal to be reviewed here. *
(Application Form, Engineering Plans, Specifications, Calculations, Etc.)
WWIS-R 02-21 (with Leasing Agreement).pdf 15.07MB
Upload only 1 PDF document (less than 250 MB). Multiple documents must be combined into one PDF file unless file is larger
than upload limit.
* By checking this box, I acknowledge that I understand the application will not be
accepted for pre -review until the fee (if required) has been received by the Non -
Discharge Branch. Application fees must be submitted by check or money order and
made payable to the North Carolina Department of Environmental Quality (NCDEQ).
I also confirm that the uploaded document is a single PDF with all parts of the
application in correct order (as specified by the application).
Mail payment to:
NCDEQ — Division of Water Resources
Attn: Non -Discharge Branch
1617 Mail Service Center
Raleigh, NC 27699-1617

Signature
01 P
Submission Date 4/18/2022

State of North Carolina
Department of Environmental Quality
Division of Water Resources
Division of Water Resources
15A NCAC 02T .0500 — WASTEWATER IRRIGATION SYSTEM — RENEWAL
FORM: WWIS-R 02-21
Pursuant to 15A NCAC 02T .0107(b), if the application does not include all required information and the necessary supporting
documentation, the application shall be returned. The application and attachments shall be prepared in accordance with 15A
NCAC 02T .0100, 15A NCAC 02T .0500, and Division Policies. For more information, visit the Water Quality Permitting
Section's Non -Discharge Branch website. The Applicant shall submit an electronic copy of the application and attachments
uploaded as a single Portable Document Format (PDF) file to https:Hedocs.de(l.nc.szov/Forms/NonDischarsze-Branch-Submittal-
Form-Ver2, or emailed to [e-mail] if less than 20 megabytes (MB).
SECTION I' APPLICANT INFORMATION
1.
Applicant: Sanford Health & Rehabilitation
2.
Permit No.: WQ007026
3.
Signature authority: B. Scott Hancox
Phone number: [phone] Cell
Title: Maintenance Director
Email: [e-mail]
4.
Mailing address: 2702 Farrell Rd.
City: Sanford
State: NC Zip: 27330-
5.
Contact person: B. Scott Hancox
Primary phone number: [phone] Cell
Email: [e-mail]
Secondary phone number: ( ) - Select
1. Physical address: 2702 Farrell Rd.
City: Sanford
2. Treatment facility coordinates to the sixth decimal degree:
Latitude: 35.567957' Longitude:-79.123113'
County: Lee Parcel No.: 9666-31-7056-00
State: NC Zip: 27330-
Method: Navigation quality GPS
SECTION III - FLOW INFORMATION
1.
Permitted flow: 15720 GPD (The maximum allowable flow based on what has been permitted)
2.
As -built flow: 15720 GPD (The maximum allowable flow based on what has been constructed)
3.
Average flow: 493 GPD (The average of all reported flows on the previous calendar year's NDMRs)
4.
Hydraulic capacity: 3.12 % (Divide the average flow in Item 3 by the As -built flow in Item 2)
5.
Wastewater composition: Domestic: 100 % Industrial: % Stormwater: %
SECTION IV -BILLING INFORMATION
1. Billing address: 2702 Farrell Rd.
City: Sanford State: NC Zip: 27330-
2. Verify the Applicant does not have any overdue annual fees:
https://deq.nc.gov/about/divisions/water-resources/water-resources-permits/wq-epayments
Pursuant to 15A NCAC 02T .0120(c), permits for renewing facilities shall not be granted if the Applicant or any affiliation has
an unpaid annual fee.
FORM: WWIS-R 02-21 Page 1 of 6

1. ORC: Randall Jarrell
Mailing address: PO Box 578
City: Pittsboro
Phone number: [phone] Cell
2. Back -Up ORC: Chad Leinbach
Mailing address: 1284 Windy Ridge Rd.
City: Chapel Hill
Phone number: [phone] Cell
Grade: Spray Certification No.: 23925
Irrigation
State: NC Zip: 27312-
Email: [e-mail]
Grade: Spray Certification No.: 23928
Irrigation
State: NC Zip: 27517-
Email: [e-mail]
SECTION VI'-' — OPEN -ATMOSPHERE STRUCTURES
1. List all open -atmosphere treatment and storage structures associated with the renewing permit. Attach additional sheets if
necessary.
Type
Parcel No.
Volume (gal)
Liner Type
Freeboard (ft)
Latitude
Longitude
Treatment
9666-31-7056-00
96,798
Full, concrete
1
35.5679570
-79.1231130
Treatment/Storage
9666-31-7056-00
401,885
Full, clay
2
35.5676720
-79.1227720
Treatment/Storage
9666-31-7056-00
1,500
Full, concrete
35.5679710
-79.2320420
Select
Select
0-
°
SECTION VII — RELATED PERMITS
1. List all wastewater permits (i.e., sewer, collection system, NPDES, residuals) that have interactions with the renewing permit.
Attach additional sheets if necessary.
Permit Type
Permit No.
Relationship Type
Discharge
WQ0007026
Receiving WWTP
Select
Select
Select
Select
Select
Select
SECTION VIII — MONITORING WELLS!
1. List all groundwater monitoring wells associated with the renewing permit. Attach additional sheets if necessary.
Well Name
Parcel No.
Status
Gradient
Location
Latitude
Longitude
MWl
9666-31-7056-00
Active
Upgradient
On Review Boundary
35.5681400
-79.1233920
MW4
9666-31-7056-00
Active
Downgradient
On Review Boundary
35.5654890
-79.1222850
MW5
9666-31-7056-00
Active
Downgradient
On Review Boundary
35.5660590
-79.1212330
Select
Select
Select
°
- °
Select
Select
Select
°
- °
Select
Select
Select
°
- °
Select
Select
Select
°
- °
Select
Select
Select
°
- °
Select
Select
Select
°
- °
FORM: WWIS-R 02-21 Page 2 of 6

Select
Select
Select
0
- 0
Select
Select
Select
0
- 0
SECTION I = IRRI"*ION FIELDS
1. List all irrigation fields associated with the renewing permit. Attach additional sheets if necessary.
Field
County
Parcel No.
Deeded Owner
Area
Cover Crop
Latitude
Longitude
I
Lee
9666-31-7056-00
Sanford Health &
Rehabilitation Co.
53014.40
Fescue
35.5668890
-79.1234750
2
Lee
9666-31-7056-00
Sanford Health &
Rehabilitation Co
70685.80
Fescue
35.5662980
-79.1230630
3
Lee
9666-31-7056-00
Sanford Health &
Rehabilitation Co
70685.80
Fescue
35.5660380
-79.1223220
4
Lee
9666-31-7056-00
Sanford Health &
Rehabilitation Co
70685.80
Fescue
35.5668780
-79.1218140
5
Lee
9666-31-7056-00
Sanford Health &
Rehabilitation Co
53014.40
Fescue
35.5676940
-79.1220490
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
FORM: WWIS-R 02-21 Page 3 of 6

O O
O O
O O
O O
Total Acreage:
8
Was the facility originally permitted or had a major modification issued after September 1, 2006?
❑ Yes — Pursuant to 15A NCAC 02T .0105(d), submit a site map pursuant to the requirements in 15A NCAC 02T .0504(d). These
requirements are:
❑ A scaled map of the site with topographic contour intervals not exceeding 10 feet or 25 percent of total site relief and showing
all facility -related structures and fences within the wastewater treatment, storage, and irrigation areas.
❑ Soil mapping units shown on all irrigation sites.
❑ The location of all wells (including usage and construction details if available), streams (ephemeral, intermittent, and
perennial), springs, lakes, ponds, and other surface drainage features within 500 feet of all wastewater treatment, storage,
and irrigation sites.
❑ Delineation of the compliance and review boundaries per 15A NCAC 02L .0107 and .0108, and 15A NCAC 02T .0506(c)
if applicable.
❑ Setbacks as required by 15A NCAC 02T .0506.
❑ Site property boundaries within 500 feet of all wastewater treatment, storage, and irrigation sites.
❑ All habitable residences or places of public assembly within 500 feet of all treatment, storage, and irrigation sites.
® No — Skip Attachment A.
ATTACHMENT I3 — SIGNATURE AUTHORITY DELEGATION
Does the signature authority in Section I, Item 3 meet the requirements pursuant to 15A NCAC 02T .0106(b)?
® Yes — Skip Attachment B.
❑ No — Submit a delegation letter pursuant to 15A NCAC 02T .0106(c) authorizing the signature authority to sign.
Does the existing permit include an approved flow reduction?
❑ Yes — Submit a copy of the flow reduction approval letter, as well as the measured monthly average amount of wastewater flow
contributed per unit for the 12 months prior to permit renewal. If any of these monthly averages are within 20% of the approved
flow reduction value, the Permittee shall provide a reevaluation of the reduced flow value pursuant to the requirements in 15A
NCAC 02T .0114(f).
® No — Skip Attachment C.
Is the Applicant a Privately -Owned Public Utility?
❑ Yes — Pursuant to 15A NCAC 02T .0115(a)(1), submit the Certificate of Public Convenience and Necessity from the North
Carolina Utilities Commission demonstrating the Applicant is authorized to hold the utility franchise.
® No — Skip Attachment D.
Is the Applicant a Home/Property Owners' Association or Developer of Lots to be Sold?
❑ Yes (Home/Property Owners' Association) — Pursuant to 15A NCAC 02T .0115(a)(2), submit an executed Operational Agreement
(FORM: HOA). Pursuant to 15A NCAC 02T .0115(c), if the applicant is a legally formed Homeowners' or Property Owner's
Association, submit a copy of the Articles of Incorporation, Declarations, and By-laws.
FORM: WWIS-R 02-21 Page 4 of 6

❑ Yes (Developer of Lots to be Sold) — Pursuant to 15A NCAC 02T .0115(a)(2), submit an executed Operational Agreement
(FORM: DEW Pursuant to 15A NCAC 02T .0115(b), if the applicant is a developer of lots to be sold, submit a copy of the
Articles of Incorporation, Declarations, and By-laws.
® No — Skip Attachment E.
FORM: WWIS-R 02-21 Page 5 of 6

ATTACHMENT F — DEMONSTRATION OF FUTURE WASTEWATER TREATMENT CAPACITIES
Is the applicant a municipality, county, sanitary district, or public utility?
❑ Yes — Proceed to the next question.
® No — Skip Attachment F.
Does the hydraulic capacity in Section III, Item 4 exceed 70%?
❑ Yes (the hydraulic capacity is greater than 70%, but less than 80%) — Pursuant to 15A NCAC 02T .0118(1), prior to exceeding
80 percent of the system's permitted hydraulic capacity (based on the average flow during the last calendar year), the permittee
shall submit an engineering evaluation of their future wastewater treatment, utilization, and disposal needs. This evaluation shall
outline plans for meeting future wastewater treatment, utilization, or disposal needs by either expansion of the existing system,
elimination or reduction of extraneous flows, or water conservation and shall include the source of funding for the improvements.
If expansion is not proposed or is proposed for a later date, a justification shall be made that wastewater treatment needs will be
met based on past growth records and future growth projections, and as appropriate, shall include conservation plans or other
measures to achieve waste flow reductions.
❑ Yes (the hydraulic capacity greater than 80%) — Proceed to the next question.
® No — Skip Attachment F.
If answered Yes above, does the hydraulic capacity in Section III, Item 4 exceed 80%?
❑ Yes (the hydraulic capacity is greater than 80%) — Pursuant to 15A NCAC 02T .0118(2), prior to exceeding 90 percent of the
system's permitted hydraulic capacity (based on the average flow during the last calendar year), the permittee shall obtain all
permits needed for the expansion of the wastewater treatment, utilization, or disposal system and, if construction is needed,
submit final plans and specifications for expansion, including a construction schedule. If expansion is not proposed or is proposed
for a later date, a justification shall be made that wastewater treatment needs will be met based on past growth records and future
growth projections, and as appropriate, shall include conservation plans or other specific measures to achieve waste flow
reductions.
® No — Skip Attachment F.
Does the Permittee own all of the land associated with the wastewater collection, treatment, conveyance, and irrigation system?
❑ Yes — Skip Attachment G.
® No — Pursuant to 15A NCAC 02T .0116(c), provide a copy of all easements, lease agreements, and encroachment agreements
allowing the Permittee to operate and maintain the wastewater collection, treatment, conveyance, and irrigation system on
property not owned by the Permittee.
ATTACHMENT II,- AFFILIATIONS
Are the Permittee's affiliations of record correct? Check affiliations.
® Yes — Skip Attachment H.
❑ No — Provide the corrected affiliations and their contact information.
ATTACHMENT I COMPLIANCE SCHEDULES
Does the existing permit include any Compliance Schedules? (See Section I of the most recently issued permit)
❑ Yes — Submit documentation that the compliance schedules have been met.
® No — Skip Attachment I.
Does the Permittee have any existing civil penalties or outstanding violations?
❑ Yes (civil penalties) — Submit payment for the civil penalty, or proof of remission request
❑ Yes (violations) — Submit a copy of your response to the Notice of Violation.
M No — Skip Attachment J.
FORM: WWIS-R 02-21 Page 6 of 6

Does the wastewater composition in Section III, Item 5 include any industrial wastewater?
❑ Yes — Proceed to the next question.
® No — Skip Attachment K.
Has the nature of the industrial wastewater changed since the last permit issuance (i.e., changes in industrial process, introduction of
new materials or chemicals, etc.)?
❑ Yes — Provide a chemical analysis of the wastewater pursuant to the requirements in 15A NCAC 02T .0504(h). Provide an
overview of the manufacturing process; an inventory of all chemical and biological materials used in the manufacturing process;
and an overview of the cleaning and treatment methodology.
❑ No — Provide an overview of the manufacturing process; an inventory of all chemical and biological materials used in the
manufacturing process; and an overview of the cleaning and treatment methodology.
Does the existing permit include setback waivers?
❑ Yes — Pursuant to 15A NCAC 02T .0506(d), provide setbacks waivers that have been written, notarized, signed by all parties
involved, and recorded with the county Register of Deeds. Waivers involving the compliance boundary shall be in accordance
with 15A NCAC 02L .0107.
® No — Skip Attachment L.
APPLICANT'S CERTIFICATION
I, T!C�S? T- �C' e attest that this application
(Signature authority's name as noted in Section 1, Item 3)
has been reviewed by me and is accurate and complete to the best of my knowledge. I understand that if all required parts of this
application package are not completed, and that if all required supporting information and attachments are not included, this
application package will be returned as incomplete. I further certify pursuant to 15A NCAC 02T .0120(b), that the applicant, or any
parent, subsidiary, or other affiliate of the applicant has: not been convicted of environmental crimes under; not previously abandoned
a wastewater treatment facility without properly closing the facility; not paid a civil penalty; not been compliant with any compliance
schedule in a permit, settlement agreement, or order; not paid an annual fee.
Note: The Applicant's Certification shall be signed pursuant to 15A NCAC 02T .0106(b). An alternate person may be delegated as
the signing official if a letter is provided pursuant to 15A NCAC 02T .0106(c). Pursuant to § 143-215.6A and § 143-215.6B, any
person who knowingly makes any false statement, representation, or certification in any application package shall be guilty of a Class
2 misdemeanor, wh'-21- may jeclude a fin t to exceed $10,000 as well as civil penalties up to $25,000 per violation.
Signature: Date: Y26 4'�
THE COMPLETED APPLICATION AND ATTACHMENTS SHALL BE SUBMITTED AS A SINGLE PDF FILE VIA:
Email:
Non-Discharae.Reports(a-)ncdenr.aov
Laserfiche Upload:
httns://edocs.de(l.nc.aov/Forms/NonDischarae-Branch-
Submittal-Form-Ver2
FORM: WWIS-R 02-21 Page 7 of 6

2702 Farrell Road a Sanford, NC 27330
[phone] - Fax: [phone]
Admissions Cell: [phone]
ww%v.sanstonehealth.com
Mom=
p'�"crnifting ESection
RECENEDINME011MR
JAN -- 5 Z017
Non-D�sc.harge
pemlitting Unit
The permitted, Sanford Health and Rehabilitation, in conjunction with the NC Water Resources,
will manage the disposal of wastewater on the property owned by Ammons Farmland, LLC. This
property is located in Lee County, North Carolina. This agreement will remain in effect, unless
odierwise amended, through the duration of the lease agreement between Pine Ridge Holdings,
LLC and Sanford Health and Rehabilitation. All parties are in agreement as indicated by
signatures below.
By: Christine P. Ammons
A
Date-, 12/14/16
By; Christopher J. Sprenger, President

LEE COUNTY LEASE AGREEMEN71
THIS LEASE AGREEMENT, made and entered into on the 1_ day of June -_, 2005,
by and between Pine Ridge Holdings, LLC, a North Carolina limited liability company,
hereinafter referred to as "Landlord", and Sanford Health and Rehabilitation Co., and
Christopher Sprenger, Owner and Mike DeLoach, Owner of Sanford Health and
Rehabilitation Co., hereinafter referred to as "Tenant";
WITNESSETH:
WHEREAS, Pine Ridge Holdings, LLC is the owner of the property hereinafter fully
described, on which there is situated buildings, personal property and other improvements,
known as "Sanford Health and Rehabilitation Co."; and
WHEREAS, Sanford Health and Rehabilitation Co., Christopher Sprenger, Owner and
Mike DeLoach, Owner is desirous of leasing from Landlord the hereinafter described properties
and operating the facilities thereon as a skilled nursing facility,
NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth,
the Landlord does hereby let and lease unto the Tenant, and the Tenant does hereby accept as
lessee of the Landlord a certain tract or parcel of land in Lee County, North Carolina, described
as follows and hereinafter referred to as the "Leased Premises":
2702 Farrell Rd
Sanford, NC 27330

TO HAVE AND TO HOLD said lands and premises and personal property, together with
all privileges and appurtenances thereunto belonging, unto the Tenant for the time and upon
conditions hereinafter set forth:
1. TERM OF LEASE
This lease shall begin on the 1st day of June, 2005, and unless sooner terminated as
hereinafter provided, shall exist and continue until the 3 1 st day of May, 2025, subject to the
provisions contained in this agreement. This agreement may be extended for additional periods,
as agreed to in writing between Landlord and Tenant prior to expiration of the lease term.
2. TOTAL MONTHLY RENT AND ADJUSTMENTS THERETO
As rental for said Leased Premises and for the equipment and furnishings to be furnished
by the Landlord, the Tenant shall pay the Landlord in advance on or before the 15th day of each
calendar month $8.50 per occupied* bed/per day based on a calendar month thru the first 7
months of the lease. Tenant shall furnish landlord with a monthly resident day calculation along
with the months' lease payment. See Exhibit A for details. In January of 2006 through
December 3 I't 2006 the rent would increase to $9.14 per available" bed/per day based on a 30
day month and subject to the annual adjustment thereafter as set forth below in this Article 2.
The first rental payment due hereunder shall be paid on or before June 15th, 2005 for the month
of June and thereafter in accordance with this Section 2; Tenant acknowledges that Landlord
may rely upon receipt of rent each month hereunder to make payment of Landlord's mortgage
obligation in connection with the Leased Premises, If Tenant does not make full payment of rent
in advance on or before the 15th day of each calendar month, Tenant shall pay unto Landlord, as
a late fee, an amount equal to any excess interest payments, late fees or expenses that Landlord
incurs in connection with that mortgage obligation due to Tenant's late payment, On December
2

3 1 st, 2006, and at the same time every year thereafter for the remaining term of this agreement, a
new monthly payment to be in effect for the next year shall be determined by multiplying the
then current monthly base rent by 1.015. (For example, on December 3 I't, 2006, the base rent of
$9.14 per bed per day would be multiplied by 1.015 increasing it to $9.28 which would be the
base rent for the year 2007)
* Number of "occupied" beds shall be equal to the number of resident days in the facility in a
calendar month.
** Number of "available beds" shall be equal to the number of beds that can be reasonably
operated in hall 2, 3, and 4, including certification for Medicare and Medicaid and any new
construction during the term of this lease. This number will increase over the life of this lease as
the remainder of the facility is remodeled, restored or rebuilt. When the number of "available
beds" is equal to the number of "licensed beds" the rent shall increase $1.00 per bed/per day (For
example, in the 4'h year of the lease the lease rate is $9.41 per bed per day and the facility has
been repaired or remodeled so that all licensed beds are available the lease rate would increase to
$10.41 per bed per day).
Tenant and landlord acknowledge that the Leased Premises are in need of repair and
agree to tour the building within the first 30 days of this lease to mutually identify areas that need
improvement, repair, or replacement by the landlord. These- improvements will be prioritized
using the criteria of-
1. DFS and local inspection results
I

2. Cost
3. Cosmetics
4. Future Plans.
After such improvements, tenant shall, at its own expense and at all times, maintain the
Leased Premises in good and safe condition, including, but not limited to, plate glass, electrical
wiring, plumbing and heating installations, sidewalks, driveways, lawns and shrubbery, and
irrigation systems and any other system or equipment upon the Leased Premises, and shall
surrender the same, at terrnination hereof, in as good a condition as received after improvements,
normal wear and tear excepted. Tenant shall be responsible for all repairs required, excepting the
roof, exterior walls, and structural foundations, which shall be maintained by the Landlord.
Landlord shall not be responsible for making any repairs which may have been occasioned or
necessitated by the negligence of the Tenant, its agents, employees, or its patients. All painting
which Tenant deems necessary shall be the responsibility of the Tenant; provided however, that
any such painting, other than the painting of minor scratches or blemishes, shall by performed by
a professional painter who has proof of insurance as required by Article: 25, and any such paint
shall match the existing paint in both color and type.
Landlord shall make all improvements, replacements, or repairs in its opinion necessary
to correct structural faults or defects in the building and shall have the right to enter the premises
at reasonable hours to make inspection and to make such improvements, replacements or repairs.
Tenant and landlord acknowledge that the building may be in need of additional
equipment and agree to tour the building within the first 30 days of commencement of this lease
M

to identify areas that need improvement, repair, or replacement by landlord. These improvements
will be prioritized using the criteria of
1. DFS and local inspection results
2. Cost
3. Cosmetics
4, Future plans.
After such improvements tenant shall, at its own expense and at all times, maintain beds,
tables, chairs, office furniture, linens, kitchen supplies and other related items and shall surrender
the same, at termination hereof, in as good condition as received after improvements, normal
wear and tear excepted. Tenant will replace, at its own expense, said items as needed with equal,
or higher valued items. Replacement items will become the property of the Landlord at the time
of replacement.
Tenant agrees that, should Landlord construct any additional nursing home beds on the
demised property, such beds, when certified by the State of North Carolina, shall be covered by
and included in this lease; provided however, that in the event of such additional beds, the
monthly rental payment will increase in an amount equal to the following: the then current per
bed rate times the number of additional beds.
Landlord,, at his sole discretion, shall be free to transfer beds to or away from the demised
property thereby changing the number of available beds at this facility. So long as Landlord
gives tenant 90 days written notice.
5

Landlord, at his sole discretion, shall be free to add to or take away from the demised
property assisted living or any other type beds thereby changing the number of available beds at
this facility.
7. LICENSING
The Tenant will maintain and operate the Leased Premises so that said facilities will
qualify for all necessary licenses under the State Board of Health and/or The North Carolina
Department of Health and Human Services for a nursing home and the Tenant shall maintain the
buildings, grounds, and equipment in such a manner that the Tenant may qualify for any such
licenses under the State Board of Health and/or the North Carolina Department of Health and
Human Services. Further, Tenant shall comply with all statutes, ordinances and requirements of
all municipal, state, and. federal authorities now in force, or which may hereafter be in force,
pertaining to the Leased Premises, occasioned by or affecting the use thereof by Tenant.
The Landlord will make every reasonable attempt to perform its stated maintenance
responsibilities so that said facilities will continue to qualify for all necessary licenses under the
State Board of Health and/or The North Carolina Department of Health and Human Services for
a nursing home. The Landlord will respond on a high priority basis to concerns expressed by a
licensing authority arising out of Landlord's failure to perform its obligations under this
agreement as shall Tenant to its responsibilities and obligations.
In the event Tenant receives notification of any kind of non-compliance or concern or
complaints about the operation of the facility from any governmental, administrative, or
licensing agency, Tenant shall within 48 hours provide Landlord with notice thereof along with
Tenant's response thereto and plan of action to handle/cure said matters.
I

8. UTILITIES
The Tenant shall be responsible for all applications and connections for necessary utility
services on the Leased Premises and all such applications and connections shall be made in the
name of the Tenant only, and the Tenant shall be solely liable for all utility expenses including,
but not limited to, lights, water, heat, gas, electricity, telephone services and sewer charges as
they become due.
This lease shall not be assigned or the Leased Premises sublet by the Tenant without the
prior written consent of the Landlord. In the event of any assignment as herein permitted, the
assignee shall be bound by all of the covenants, agreements and provisions herein contained and the
party named as Tenant herein shall continue and remain bound for the fulfillment and performance
of the terms, covenants, agreements and provisions herein contained to be kept and performed after
the date of such assignment.
All the covenants herein contained shall inure to the benefit of and be binding upon the
respective heirs, successors and assigns of the parties hereto.
1 1011"19"Od"I W
Tenant shall not own or operate any other nursing home type facilities inside of a 15 mile
radius without written permission of landlord during the life of this lease or for a period of 6
months after termination of this lease.
I N 1,111OLKI) LAMLIF.T"M
In the event the Leased Premises are damaged by fire or other casualty to such an extent that
in the sole judgment of Landlord it is not economically desirable to restore or repair said Leased
Premises, this lease shall thereupon terminate. Landlord agrees to notify Tenant of its intention to,
restore, or not to restore, within thirty (30) days of such damage by fire or casualty,
7

In the event that, following any damage to said Leased Premises by fire or other casualty,
Landlord elects to restore or repair said Leased Premises, and such restoration or repair can be
completed within one hundred and eighty (180) days following the damage requiring such
restoration or repair, the parties hereto agree that said Leased Premises shall forthwith be repaired
and restored by Landlord to the approximate condition of the Leased Premises existing before said
fire or other casualty and this lease shall remain in full force and effect; provided, however, that the
rent during the period of such repair shall be reduced to in amount which bears the same ratio to the
rent provided for herein as the portion of the Leased Premises then available for use bears to the
entire Leased Premises, and upon completion of such repair the rent shall thereafter be paid by
Tenant at the same rate as though there had been no fire or other casualty,
12. INDEMNIFICATION
Landlord shall not be liable for injury or loss to the person or property of Tenant, or
persons claiming through Tenant, in or about the Leased Premises, unless caused by the
negligence of Landlord or its agents.
Tenant agrees to indemnify and save harmless the Landlord, its agents, servants, and
employees, from any and all claims by, or on behalf of, any person, firm or corporation arising
by reason of injury to person or property occurring on the Leased Premises, when such injury is
occasioned in all or in part by any act or omission on the part of the Tenant or an employee
(whether or not acting within the scope of employment), agent, visitor or assignee, or by reason
of any unlawful use of the premises or any breach, violation or nonperformance of any covenant
in this lease on the part of the Tenant,
8

Mis
Landlord shall have the right to enter the Leased Premises at all reasonable times for the
purpose of inspection, maintenance, or other reasonable purposes. Tenant will also permit
Landlord at any time within sixty (60) days prior to the expiration of this lease to place upon the
Leased Premises any usual "For Lease" signs, and permit persons desiring to lease the same to
inspect the Leased Premises hereafter.
11MMIM1119MM
If the Tenant should continue to occupy the Leased Premises after the expiration of the term
herein provided and any extension or renewal thereof, without any agreement in writing with the
Landlord as to the term of such continued possession, then such additional tenancy shall be on a
month to month basis under the same terms and conditions as existed immediately prior to such
holding over. In case of such continued possession, the month to month tenancy created thereby
may be terminated and canceled by the Landlord or by the Tenant by giving sixty (60) days written
notice to the other party.
No waiver by Landlord of any provision hereof shall be deemed to have been made
unless such waiver be in writing and signed by Landlord. The failure of Landlord to insist in any
one or more instances upon the strict performance of any of the covenants or conditions of this
lease, or to exercise any option herein conferred, shall not be construed as waiving or
relinquishing for the future any such covenants, conditions or option, but the same shall continue
and remain in full force and effect.
9

Tenant may make at its own expense and with prior written approval of the Landlord, and
DFS if necessary, such alterations or improvements in or on the Leased Premises as Tenant may
deem necessary or desirable provided that Tenant shall hold Landlord harmless from any liens
arising therefrom. All such improvements and alterations made upon the Leased Premises by the
Tenant shall at the option of Landlord become the property of the Landlord.
17. QUIET ENJOYMENT
The Landlord hereby covenants and agrees that the Tenant, upon performing the covenants,
agreements, stipulations and conditions hereof, shall peacefully and quietly enjoy the Leased
Premises for the teen hereinabove provided.
810 1
If at any time during the term of this lease the whole or any part of the Leased Premises shall
be taken by any lawful power or authority by the exercise of the night of condemnation or eminent
domain, the Landlord shall be entitled to and shall receive any and all awards that may be made in
any such proceeding and no part of any such award shall belong to the Tenant,
If such proceedings shall result in the taking of the whole of the Leased Premises, or such
portion thereof as will make the remaining portion of the Leased Premises unsuitable for the pur-
poses herein leased, then in either of such events, this lease shall cease from the time when
possession is taken by such public authority and the rental shall be accounted for between the
Landlord and the Tenant as of the date of surrender of possession.
If the portion of the Leased Premises taken by condemnation does not make the remaining
portion of the Leased Premises unsuitable for the purposes herein leased, this lease shall terminate
only as to the portion of the Leased Premises so taken, and this lease shall continue for the balance
10

of its term as to the part of the Leased Premises remaining, but the rent to be paid by the Tenant
after such taking for the remaining part of the Leased Premises shall be subject to an equitable
reduction.
If the portion of the Leased Premises taken by condemnation does not make the remaining
portion of the Leased Premises unsuitable for the purposes herein leased, the Landlord shall, with
reasonable dispatch, repair any damage to the remaining portion of the Leased Premises caused by
such condemnation, but the Landlord shall not be obligated to expend thereon more than the sum
allowed to the Landlord in such condemnation proceeding for damage to the Leased Premises, less
all expenses incurred by the Landlord in such proceeding,
The Tenant covenants and agrees that if
(i) default shall be made in the payment of any rent and if such
default shall continue for 10 days after receipt by Tenant of
written notice thereof from the Landlord; or
(ii) default shall be made in the performance of any other
agreement, covenant or stipulation herein contained to be
performed by the Tenant, and if such default shall neither be
cured, nor begun to be corrected, within 30 days after receipt
by Tenant of written notice thereof from the Landlord,
then and in either of such events it shall be lawful for the Landlord, at any time thereafter, without
waiving any right against the Tenant, to enter upon and repossess the Leased Premises without
11

prejudice to any rights or remedies to which the Landlord may be entitled by law against the Tenant;
provided, however, that such default and repossession shall not terminate this lease or release the
Tenant from liability hereunder unless the Landlord elects to declare this lease terminated by such
default as hereinafter provided. In case of such re-entry and repossession, the Landlord may lease
or relet said Leased Premises to any other tenant or tenants who may be satisfactory to the Landlord
and for such term or terms and for such rent as the Landlord may deem advisable and, if the amount
of the rent is less than Tenant's rent, Tenant shall immediately pay the difference on demand to
Landlord, but if in excess of Tenant's rent, the entire amount shall belong to Landlord free of any
claim of Tenant thereto. All expenses of Landlord in repairing, restoring or altering the Leased
Premises for reletting, together with leasing fees and all other expenses in seeking and obtaining a
new tenant, shall be charged to and a liability of Tenant, Landlord's reasonable attorney's fees in
pursuing any of the foregoing remedies, or in collecting any rents due by Tenant hereunder, shall be
paid by Tenant, which fees as to rents collected shall be the actual cost incurred not to exceed 50%
of the amount of such rents.
In the event such default occurs and the Landlord elects to repossess said premises and hold
the Tenant bound hereunder, the Landlord agrees to undertake to lease orrelet said premises to the
best advantage and for the highest rent reasonably available.
The Tenant covenants and agrees that if default shall be made in the payment of any
monthly installment of rent or in the performance by the Tenant of any agreement, covenant or
stipulation herein contained to be performed by the Tenant, and if such default or nonperformance
shall continue for a period of time such as would entitle the Landlord to repossess the Leased
Premises under Article 19, above, then and in any of such events it shall be lawful for the Landlord,
IF

at the option of the Landlord, to declare this lease and all rights hereunder terminated and to recover
possession of said Leased Premises.
Tenant further covenants and agrees that, if this Lease is terminated pursuant to Articles 19,
20 or 23, then Tenant will execute the "Assignment and Assumption Agreement (Medicare and
Medicaid Provider Agreements and Facility Name)" attached hereto as Exhibit B and all other
necessary documents to transfer any provider numbers, provider agreements, or any other local,
state, or federal licenses, certificates, or agreements of any kind to the person or entity as directed by
Landlord,
21. NOTICE OF DEFAULT OR NONPERFORMANCE
It is covenanted and agreed that, before the Landlord shall be entitled or have the tight to
repossess said Leased Premises as set forth in the Article entitled "REPOSSESSION" herein, or to
terminate this lease as set forth in the article entitled "TERMINATION" herein, on account of
default in the payment of any installment of rent or on account of the nonperfonnance of any
covenant, agreement or stipulation on the part of the Tenant, the said Landlord shall notify the
Tenant in writing of such default or nonperformance, and the Tenant shall have ten (10) days after
receipt of such notice by the Landlord in which to pay any past due and unpaid rent and attendant
late fees and thirty (30) days after receipt to perform such other covenants or stipulations as the
Tenant may have omitted or neglected to perform; and if the Tenant shall pay such rent and
attendant late fees and perform such covenants and stipulation within the permitted period from the
date of receipt of such written notice, then the Tenant's delay or neglect or default in paying such
rent or performing such covenant or stipulation shall in no manner affect this lease, and this lease
shall remain in full force and effect as though no such default or nonperformance of any covenant or
stipulation had occurred.
13

All notices, consents and approvals required or authorized by this lease to be given by or on
behalf of either party to the other shall be in writing and signed by a duly designated representative
of the party by or on whose behalf they are given, and shall be deemed received (i) when delivered
by hand to the designated office or (ii) three days after a registered or certified letter, properly
addressed, postage prepaid, is deposited in any United States Post Office.
Any notice required to be given to the Tenant under the teens hereof shall be served in
person or by Registered or Certified Mail to the Tenant at the offices of the Tenant at the Leased
Premises, or at such other address as the Tenant may in writing designate to the Landlord, or such
notice may be served upon the Tenant by any lawful process officer.
Any notice required to be given to the Landlord under the teens hereof shall be served in
person or by Registered or Certified Mail to the Landlord at the office of the Landlord at 1973
Farrell Road, Sanford, North Carolina, 27330 or at such other address as the Landlord may in
writing designate to the Tenant, or such notice may be served upon the Landlord by any lawful
process officer.
22. INCREASES IN INTEREST
In the event there is any increase, during any year over the term of this lease, in the
interest rate of the loan to fund the development of the Leased Premises over and above the rate
initially acquired with the loan, Tenant shall pay to Landlord, upon presentation of bank loan
statements, an amount equal to 50% of the increase in loan payment. (Example: The monthly
payment on a $1,000,000 / 7% / 20 year loan = $7752.99, If the interest rate rose by .25 the new
payment would be $7903.76 for an increase of $150.77. Tenant would be responsible for $75.38
per month. This amount can be paid as part of the lease payment or as a totally separate
14

payment.) Landlord agrees to use any reasonable means to keep this interest rate as low as
possible.
It is further agreed between the Landlord and the Tenant that if the Tenant shall be declared
insolvent or adjudicated a bankrupt, or if the Tenant shall make an assignment for the benefit of
creditors or otherwise, or if a trustee in bankruptcy or a receiver be appointed for said Tenant,
whether under the operation of the Federal law or of the State law, then and in any of said events the
Landlord, without prejudice to any of the other rights of the Landlord hereunder, shall have the right
at the option of the Landlord, immediately and without notice to the Tenant or any assignee,
transferee, receiver, trustee or any other person or persons, to ten-ninate this lease and immediately
take possession of the Leased Premises.
Tenant agrees that this lease will either be subordinate or superior to any mortgage
heretofore or hereafter executed by Landlord covering the Leased Premises, depending on the
requirements of such mortgagee. Tenant on request will execute such agreement making this lease
superior or subordinate as Landlord's mortgagee may request, and will agree to attom to said
mortgagee providing the mortgagee agrees not to disturb Tenant's possession hereunder so long as
Tenant is in compliance with this lease. Further, Tenant agrees to execute within 10 business days
of request therefore, and as often as requested, estoppel certificates setting forth the facts with
respect to date of occupancy, termination date of this lease, the amount of rent due and date to
which rent is paid, whether or not it has any defense or offsets to the enforcement of the lease or
knowledge of any default or breach by Landlord, and that this lease is in full force and effect except
15

as to any modifications or amendments, copies of which Tenant shall attach to such estoppel
certificate.
25. INSURANCE
Tenant, at its own expense, shall maintain fire and extended coverage insurance on the
building and its contents for not less than the appraised value of the building and its contents,
naming the landlord as the insured, and in the event of any loss of such articles by fire or other
causes, recovery shall be obtained by and be the property of the Landlord.
Tenant shall at all times during the term of this Agreement maintain general liability,
personal injury and property damage insurance naming both Landlord and Tenant as named co-
insured and providing coverage and coverage limits reasonably satisfactory to Landlord, except that
the limits of liability shall not be less than $1 million per loss or occurrence. Tenant shall cause all
contractors and subcontractors performing work on its behalf on, the Leased Premises to maintain
workers' compensation and public liability insurance providing such coverages and limits of liability
as shall be reasonably required from time to time by Landlord. Tenant shall furnish to Landlord a
certificate of insurance for each insurance policy required hereunder. Such certificates shall contain
a provision for thirty (30) days' prior written notice to both parties of any cancellation or change.
26. ENVIRONMENTAL AND OTHER LEGAL COMPLIANCE
A. Tenant's_ Responsibility. Tenant covenants and agrees that, at all times during
Tenant's occupancy .and use of the Leased Premises, Tenant shall strictly comply with all applicable
statutes, laws, rules, ordinances, orders, directives, permits and regulations, whether now existing or
hereafter promulgated (hereinafter collectively referred to as "Laws") of all state, federal, local and
other governmental and regulatory authorities, agencies and bodies, including without limitation,
Laws which pertain to environmental matters, or which regulate, prohibit, or otherwise have to do
16

with asbestos or other toxic, radioactive or hazardous wastes or materials or the clean-up or removal
of damage caused by any of the foregoing.
The Tenant shall promptly furnish to Landlord copies of (i) any notice, inquiry or any other
communication from any governmental authority received by or known to Tenant which pertains in.
any way to any violation of any Law with respect to the Leased Premises, and (ii) any written report
or any other communication from Tenant to any governmental authority pertaining in any way to
any violation of any Law with respect to the Leased Premises that is required to be filed by or is
requested of Tenant by any governmental authority.
B. Tenant's Liability. Tenant shall hold Landlord free, harmless, and indemnified from
all penalties, fines, claims, demands, liabilities, costs, and charges whatsoever which Landlord shall
incur, or which Landlord would otherwise incur, by reason of (i) Tenant's failure to comply with the
requirements of this Article 26, or (ii) the placement of asbestos or toxic, radioactive or hazardous
wastes or materials on the Leased Premises by or on behalf of Tenant (without regard to fault or
neglect on the part of Tenant) at any time that Tenant has had possession of any part of the Leased
Premises, (such failure or placement being referred to as an "Indemnified Event"), The Tenant's
indemnification obligations -under the preceding sentence shall extend to and cover, without
limitation: (i) the cost of remedying the condition resulting from such Indemnified Event to the
extent required to remedy the violation of any Law which resulted from such condition; (11) the
reasonable cost of all appropriate tests and examinations of the Leased Premises to confirm that they
have been brought into compliance with all Laws; and (iii) the reasonable fees and expenses of
Landlord's attorneys, engineers, and consultants incurred by Landlord in (1) enforcing, and
confirming compliance with, this Article 26, and (2) investigating, defending, settling, complying
with or otherwise responding to claims and charges arising out of the existence of such materials or
17

wastes on the Leased Premises or Tenant's other noncompliance or alleged non-compliance with the
requirements and obligations of this section. For purposes of this Article 26, the term "Leased
Premises" shall also include all soil and surface water located upon or downstream from, and all
groundwater located under or downstream from, the Leased Premises as otherwise defined in this
Agreement,
C. Inspections by Landlord. Landlord and its engineers, technicians, and consultants
(collectively the "Auditors") may, from time to time as Landlord deems appropriate, conduct
periodic tests and examinations ("Audits") of the Leased Premises to confirm and monitor Tenant's
compliance with the requireinents of this Article 26. Such Audits shall be conducted in such,
manner as to minimize the interference with Tenant's pcnnitted activities on the Leased Premises.
Tenant shall fully cooperate with Landlord and its Auditors in the conduct of such Audits. The cost
of such Audits shall be paid by Landlord unless an Audit shall disclose a material and substantial
failure of Tenant to comply with this section. Tenant hereby grants to Landlord permission to enter
the Leased Premises to carry out the audits and, in this connection, Landlord agrees to the extent
possible to give Tenant notice at least 24 hours in advance of the inspection,
D. Liability
, y after Termination of Lease. The covenants contained herein shall survive
the expiration or termination of this Agreement, and shall continue for so long as Tenant may be
subject to any expense, liability, charge, penalty, or obligation against which Tenant has agreed to
indemnify the Landlord under Article 26,
Unless this lease has been sooner terminated in accordance with the provisions hereof, the
Landlord hereby agrees that, subject to the provisions of this Article entitled "OPTION TO
EXTEND LEASE," the Tenant shall have the option and privilege of renewing and extending this
18

lease for two (2) additional period of five (5) years (herein referred to as the "renewal period") with,
the renewal period to be upon the same terms and conditions as provided herein, except that the
rental for the renewal period shall be as agreed to by the parities prior to the commencement of the
renewal period. This option to extend said lease for said renewal period is made upon the condition,
however, that the Tenant notify the Landlord in writing at least one hundred and eighty (180) days
prior to the expiration of the original term of this lease of the election of the Tenant to exercise said
option, and if the Tenant fails to give such notice to the Landlord on or before the date specified
herein, the option contained in this paragraph shall expire and be null and void.
28. TENANT TO HAVE RIGHT OF FIRST REFUSAL TO PURCHASE PROPERTY
Tenant, upon paying the rent herein reserved and performing all of the terms, covenants and
conditions herein contained on its part to be kept, and provided Tenant is not in default hereunder,
shall have a right of first refusal to purchase the Leased Premises. If during the term of this lease the
Landlord shall have a bona fide offer to purchase the Leased Premises, the Landlord shall notify the
Tenant in writing of such bona fide offer stating the amount and ternis thereof. Tenant shall have ten
(10) days following the mailing of said written notice within which to notify the Landlord in writing
as to whether the Tenant desires to purchase the Leased Premises for the same amount and under
the same terms contained in the bona fide offer to purchase. Any failure of the Tenant to respond to
the Landlord's notice of the bona fide offer within said ten (10) days shall be conclusively presumed
to be an election not to purchase the Leased Premises. If Tenant elects to purchase the Leased
Premises, the Landlord shall sell the Leased Premises to Tenant for the same amount and under the
same terrns contained in the bona fide offer; provided however, the Tenant must pay the amount and
comply with the terms contained in the bona fide offer within thirty (30) days of their election to
purchase the Leased Premises, TIME BEING OF THE ESSENCE, Failure to do so shall be a
19

default under this provision and release the Landlord therefrom to sell the Leased Premises to a third
party.
In case suit should be brought for recovery of the Leased Premises, or for any sum due
hereunder, or because of any act which may arise out of the possession of the premises, by either
party, the prevailing party shall be entitled to all costs incurred in connection with such action,
including any reasonable attorney's fees,
30. TAXES
The Tenant agrees to pay all ad valorem taxes levied against the Leased Premises during the
term of this lease. The Tenant agrees to pay all taxes on all fixtures, equipment, merchandise and
other personal property, including, but not limited to, all such item placed in said Leased Premises
by the Tenant and to provide Landlord with a copy of the personal property listed for tax purposes
eech year.
31. MISCELLANEOUS
This Agreement contains the entire Agreement between the parties hereto. There are no oral
or written understandings, terms or conditions, and neither party has relied upon any representation,
expressed or implied, not contained in this Agreement. This Agreement can not be changed,
modified or supplemented orally. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and assigns; shall be governed by and construed by the laws
of the State of North Carolina; and if any provision of this Agreement be declared invalid or
unenforceable, the remainder of this Agreement shall continue in full force and effect.
M WITNESS WHEREOF, the parties have caused this instrument to be executed on the
day and year first above written, all pursuant to authority duly granted,
20

PINE RIDGE HOLDINGS,LIL,C
LANDLORD
Title
BY-
yye
Na
SANFORD HEALTHCARE
AND REHABILITATION
CI III is,r :: m-] E
SPRENGEWMIKE De1r,OACH
TENANT � �,,........
Y.
C"fl—T,Stophe S . cen g r; 11, c sit "i firer
BY:
Michael Dc;Loach, ice President/Secretary
2.1