WQ0007026_Final Permit_20170302

Water Resources
ENVIRONMENTAL QUALITY
March 2, 2017
JOSEPH RYAN — DIRECTOR OF MAINTENANCE
SANFORD HEALTH & REHABILITATION CO.
2702 FARRELL ROAD
SANFORD, NORTH CAROLINA 27330
Dear Mr. Ryan:
ROY COOPER
Governor
MICHAEL S. REGAN
Secretary
S. JAY ZIMMERMAN
Director
Subject: Permit No. WQ0007026
Sanford Health & Rehabilitation
Wastewater Irrigation System
Lee County
In accordance with your permit renewal request received July 6, 2016, and subsequent additional
information received September 30, 2016 and January 5, 2017, we are forwarding herewith Permit No.
WQ0007026 dated March 2, 2017, to the Sanford Health & Rehabilitation Co. for the continued operation
of the subject wastewater treatment and irrigation facilities.
The modifications to the subject permit are as follows: Five spray irrigation fields have been
combined to a single eight acre irrigation field as seen in Attachment B.
This permit shall be effective from the date of issuance until February 28, 2022, shall void Permit
No. WQ0007026 issued October 30, 2009, and shall be subjectto the conditions and limitations as specified
therein. Please pay particular attention to the monitoring requirements listed in Attachments A, B and C
for they may differ from the previous permit issuance. Failure to establish an adequate system for collecting
and maintaining the required operational information shall result in future compliance problems.
Please note the following permit condition and attachment have been modified since the last
permit issuance dated October 30, 2009:
➢ Condition II.11. — The setbacks in this condition were inadvertently changed during the
previous permit issuance. Accordingly, the original setbacks have been restored.
➢ Attachment C Groundwater Monitoring and Limitations — Nitrogen, Ammonia Total (as N)
now has a daily ]maximum of 1.5 mg/L.
➢ Attachment C Groundwater Monitoring and Limitations —Solids, Total Dissolved- 100°C has
been added with a daily maximum of 500 mg/L.
<-_�"—Nothing Compares'.—,
State of North Carolina I Environmental Quality I Water Resources I Water Quality Permitting I Non -Discharge Permitting
1617 Mail Service Center I Raleigh, North Carolina 27699-1617
919-807-6332

Mr. Joseph Ryan
March 2, 2017
Page 2 of 2
If any parts, requirements or limitations contained in this permit are unacceptable, the Permittee
has the right to request an adjudicatory hearing upon written request within 30 days following receipt of
this permit. This request shall be in the form of a written petition, conforming to Chapter 150B of the North
Carolina General Statutes, and filed with the Office of Administrative Hearings at 6714 Mail Service
Center, Raleigh, NC 27699-6714. Unless such demands are made, this permit shall be final and binding.
If you need additional information concerning this permit, please contact Ashley Kabat at (919)
807-6348or ashley.kabatgncdenngov.
Sincerely,
S. Jay Zimmerman, P.G., Director
Division of Water Resources
cc: Lee County Health Department (Electronic Copy)
Raleigh Regional Office, Water Quality Regional Operations Section (Electronic Copy)
Digital Permit Archive (Electronic Copy)
Central Files

NORTH CAROLINA
ENVIRONMENTAL MANAGEMENT COMMISSION
DEPARTMENT OF ENVIRONMENTAL QUALITY
RALEIGH
WASTEWATER IRRIGATION SYSTEM PERMIT
In accordance with the provisions of Article 21 of Chapter 143, General Statutes of North Carolina as
amended, and other applicable Laws, Rules and Regulations
PERMISSION IS HEREBY GRANTED TO
Sanford Health & Rehabilitation Co.
Lee County
FOR THE
continued operation of a 15,720 gallon per day (GPD) wastewater treatment and irrigation facility
consisting of:
a grease trap; four septic tanks; an influent flow meter; a 4,560 square foot (W) sand filter; a 30 day storage
pond; a chemical feed chlorinator; a 2,000 gallon chlorine contact tank; duplex irrigation pumps with an
automatic irrigation timer; an 8 acre spray irrigation field; and all associated piping, valves, controls, and
appurtenances
to serve Sanford Health & Rehabilitation, with no discharge of wastes to surface waters, pursuant to the
application received July 6, 2016, and subsequent additional information received by the Division of Water
Resources, and in conformity with the project plans, specifications, and other supporting data subsequently
filed and approved by the Department of Environmental Quality and considered a part of this permit.
This permit shall be effective from the date of issuance until February 28, 2022, shall void Permit No.
WQ0007026 issued October 31, 2009 and shall be subject to the following specified conditions and
limitations:
I. SCHEDULES
No later than six months prior to the expiration of this permit, the Permittee shall request renewal of
this permit on official Division forms. Upon receipt of the request, the Division will review the
adequacy of the facilities described therein, and if warranted, will renew the permit for such period of
time and under such conditions and limitations as it may deem appropriate. Please note Rule 15A
NCAC 02T .0105(d) requires an updated site map to be submitted with the permit renewal application.
[ 15A NCAC 02T .0105(d), 02T .0106, 02T .0109, 02T .0115(c)]
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H. PERFORMANCE STANDARDS
The subject non -discharge facilities shall be effectively maintained and operated at all times so there is
no discharge to surface waters, nor any contravention of groundwater or surface water standards. In
the event the facilities fail to perform satisfactorily, including the creation of nuisance conditions due
to improper operation and maintenance, or failure of the irrigation areas to adequately assimilate the
effluent, the Permittee shall take immediate corrective actions including Division required actions, such
as the construction of additional or replacement wastewater treatment or irrigation facilities. [G.S. 143-
215.1, 143-213.3(a)]
2. This permit shall not relieve the Permittee of their responsibility for damages to groundwater or surface
water resulting from the operation of this facility. [15A NCAC 02B .0200, 02L .0100]
3. All wells constructed for purposes of groundwater monitoring shall be constructed in accordance with
15A NCAC 02C .0108 (Standards of Construction for Wells Other than Water Supply), and any other
jurisdictional laws and regulations pertaining to well construction. [15A NCAC 02C .0108]
4. Effluent quality shall not exceed the limitations specified in Attachment A. [15A NCAC 02T
.0108(b)(1)]
5. Application rates, whether hydraulic, nutrient or other pollutant, shall not exceed those specified in
Attachment B. [15A NCAC 02T .0505(c), 02T .0505(n)]
6. This disposal system was individually permitted on or after December 30, 1983; therefore, the
compliance boundary is established at either 250 feet from the effluent disposal area, or 50 feet within
the property boundary, whichever is closest to the effluent disposal area. An exceedance of
groundwater standards at or beyond the compliance boundary is subject to remediation action according
to 15A NCAC 02L .0106(d)(2) as well as enforcement actions in accordance with North Carolina
General Statute 143-215.6A through 143-215.6C. [15A NCAC 02L .0106(d)(2), 02L .0107(b)]
7. In accordance with 15A NCAC 02L .0108, the review boundary is established midway between the
compliance boundary and the effluent disposal area. Any exceedance of groundwater standards at the
review boundary shall require action in accordance with 15A NCAC 02L .0106. [15A NCAC 02L
.0106, 02L .0108]
8. The Permittee shall apply for a permit modification to establish a new compliance boundary prior to
any sale or transfer of property affecting a compliance boundary. [ 15A NCAC 02L .0107(c)]
9. In accordance with 15A NCAC 02L .0107(d), no wells, excluding Division approved monitoring wells,
shall be constructed within the compliance boundary except as provided for in 15A NCAC 02L
.0107(g). [ 15A NCAC 02L .0107]
10. Except as provided for in 15A NCAC 02L .0107(g), the Permittee shall ensure any landowner who is
not the Permittee and owns land within the compliance boundary shall execute and file with the Lee
County Register of Deeds an easement running with the land containing the following items:
a. A notice of the permit and number or other description as allowed in 15A NCAC 02L .0107(f)(1);
b. Prohibits construction and operation of water supply wells within the compliance boundary; and
c. Reserves the right of the Permittee or the State to enter the property within the compliance boundary
for purposes related to the permit.
The Director may terminate the easement when its purpose has been fulfilled or is no longer needed.
[15A NCAC 02L .0107(f)]
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11. The facilities permitted herein shall be constructed according to the following setbacks:
a. The setbacks for irrigation sites permitted under 15A NCAC 02H .0200 shall be as follows (all
distances in feet):
i. Any habitable residence or place of public assembly under separate ownership: 400
ii. Surface waters: 100
iii. Any well with exception of monitoring wells: 100
iv. Any property line: 150
v. Public right of way: 50
[15A NCAC 02H .02190)]
b. The setbacks for storage and treatment units permitted under 15A NCAC 02H .0200 shall be as
follows (all distances in feet):
i. Any well with exception of monitoring wells: 100
ii. Any property line: 50
[15A NCAC 02H .02190)]
III. OPERATION AND MAINTENANCE REQUIREMENTS
1. The facilities shall be properly maintained and operated at all times. The facilities shall be effectively
maintained and operated as a non -discharge system to prevent the discharge of any wastewater resulting
from the operation of this facility. The Permittee shall maintain an Operation and Maintenance Plan,
which at a minimum shall include operational functions, maintenance schedules, safety measures and
a spill response plan. [ 15A NCAC 02T .0507]
2. Upon the Water Pollution Control System Operators Certification Commission's (WPCSOCC)
classification of the subject non -discharge facilities, in accordance with 15A NCAC 08G 0200 the
Permittee shall designate and employ a certified operator in responsible charge (ORC) and one or more
certified operator(s) as back-up ORC(s). The ORC or their back-up shall visit the facilities in
accordance with 15A NCAC 08G .0200, and shall comply with all other conditions specified in the
previously cited rules. [15A NCAC 02T .0117]
3. A suitable year round vegetative cover shall be maintained at all times, such that crop health is
optimized, allows for even distribution of effluent and allows inspection of the irrigation system. [15A
NCAC 02T .0108(b)(1)]
4. Adequate measures shall be taken to prevent effluent ponding in or runoff from the irrigation sites listed
in Attachment B. [15A NCAC 02T .0108(b)(1)]
5. Irrigation shall not be performed during inclement weather or when the ground is in a condition that
will cause ponding or runoff. [15A NCAC 02T .0108(b)(1)]
6. All irrigation equipment shall be tested and calibrated at least once per permit cycle. Calibration records
shall be maintained at the facility for a period of no less than five years, and shall be made available to
the Division upon request. [15A NCAC 02T .0108(b)(1)]
7. Only effluent from Sanford Health and Rehabilitation shall be irrigated on the sites listed in Attachment
B. [G.S. 143-215.11
8. No automobiles or machinery shall be allowed on the irrigation sites except during equipment
installation or while maintenance is being performed. [15A NCAC 02T .0108(b)(1)]
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9. Public access to the irrigation sites and wastewater treatment facilities shall be prohibited. [15A NCAC
02T .0505(q)]
10. The residuals generated from the wastewater treatment facilities shall be disposed or utilized in
accordance with 15A NCAC 02T .1100. The Permittee shall maintain a residual management plan
pursuant to 15A NCAC 02T .0508. [15A NCAC 02T .0508, 02T .1100]
11. Diversion or bypassing of untreated or partially treated wastewater from the treatment facilities is
prohibited. [15A NCAC 02T .05050)]
12. Freeboard in the 30 day storage pond shall not be less than two feet at any time. [15A NCAC 02T
.0505(d)]
13. A gauge to monitor waste levels in the 30 day storage pond shall be provided. This gauge shall have
readily visible permanent markings, at inch or tenth of a foot increments, indicating the following
elevations: maximum liquid level at the top of the temporary liquid storage volume; minimum liquid
level at the bottom of the temporary liquid storage volume; and the lowest point on top of the dam.
[15A NCAC 02T .0108(b)(1)]
14. A protective vegetative cover shall be established and maintained on all earthen embankments (i.e.,
outside toe of embankment to maximum allowable temporary storage elevation on the inside of the
embankment), berms, pipe runs, erosion control areas, and surface water diversions. Trees, shrubs, and
other woody vegetation shall not be allowed to grow on the earthen dikes or embankments. Earthen
embankment areas shall be kept mowed or otherwise controlled and accessible. [I 5A NCAC 02T
.0108(b)(1)]
IV. MONITORING AND REPORTING REQUIREMENTS
1. Any Division required monitoring (including groundwater, plant tissue, soil and surface water analyses)
necessary to ensure groundwater and surface water protection shall be established, and an acceptable
sampling reporting schedule shall be followed. [15A NCAC 02T .0108(c)]
2. A Division certified laboratory shall conduct all laboratory analyses for the required effluent,
groundwater or surface water parameters. [15A NCAC 02H .0800]
3. Flow through the treatment facility shall be continuously monitored, and daily flow values shall be
reported on Form NDMR.
The Permittee shall install and maintain an appropriate flow measurement device to ensure the accuracy
and reliability of flow measurement consistent with accepted engineering and scientific practices.
Selected flow measurement devices shall be capable of measuring flows with a maximum deviation of
less than ten percent from true flow; accurately calibrated at a minimum of once per year; and
maintained to ensure the accuracy of measurements is consistent with the selected device's accepted
capability. The Permittee shall maintain records of flow measurement device calibration on file for a
period of at least five years. At a minimum, documentation shall include:
a. Date of flow measurement device calibration,
b. Name of person performing calibration, and
c. Percent from true flow.
[I5A NCAC 02T .0105(k)]
4. The Permittee shall monitor the effluent from the subject facilities at the frequencies and locations for
the parameters specified in Attachment A. [15A NCAC 02T .0108(c)]
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The Permittee shall maintain adequate records tracking the amount of effluent irrigated. At a minimum,
these records shall include the following information for each irrigation site listed in Attachment B:
a. Date of irrigation;
b. Volume of effluent irrigated;
c. Site irrigated;
d. Length of time site is irrigated;
e. Continuous weekly, monthly, and year-to-date hydraulic (inches/acre) loadings;
£ Continuous monthly and year-to-date loadings for any non -hydraulic parameter specifically
limited in Attachment B;
g. Weather conditions; and
h. Maintenance of cover crops.
[I5A NCAC 02T .0108(c)]
6. Freeboard (i.e., waste level to the lowest embankment elevation) in the 30 day storage pond shall be
measured to the nearest inch or tenth of a foot, and recorded weekly. Weekly freeboard records shall
be maintained at the facility for a period of no less than five years, and shall be made available to the
Division upon request. [15A NCAC 02T .0108(c)]
Three copies of all monitoring data (as specified in Conditions IV.3. and IVA.) on Form NDMR for
each PPI and three copies of all operation and disposal records (as specified in Conditions IV.5. and
IV.6.) on Form NDAR-1 for every site in Attachment B shall be submitted on or before the last day of
the following month. If no activities occurred during the monitoring month, monitoring reports are still
required documenting the absence of the activity. All information shall be submitted to the following
address:
Division of Water Resources
Information Processing Unit
1617 Mail Service Center
Raleigh, North Carolina 27699-1617
[15A NCAC 02T .0105(l)]
A record shall be maintained of all residuals removed from this facility. This record shall be maintained
at the facility for a period of no less than five years, and shall be made available to the Division upon
request. At a minimum, this record shall include:
a. Name of the residuals hauler;
b. Non -Discharge permit number authorizing the residuals disposal, or a letter from a municipality
agreeing to accept the residuals;
c. Date the residuals were hauled; and
d. Volume of residuals removed.
9. A maintenance log shall be maintained at this facility. This log shall be maintained at the facility for a
period of no less than five years, and shall be made available to the Division upon request. At a
minimum, this log shall include:
a. Date of calibration of flow measurement device;
b. Visual observations of the plant and plant site; and
c. Record of preventative maintenance (e.g., changing of equipment, adjustments, testing, inspections
and cleanings, etc.).
[15ANCAC 02T .0108(b)(1)]
10. Monitoring wells shall be sampled at the frequencies and for the parameters specified in Attachment
C. All mapping, well construction forms, well abandonment forms and monitoring data shall refer to
the permit number and the well nomenclature as provided in Attachment C and Figure 1. [15A NCAC
02T .0105(m)]
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11. Two copies of the monitoring well sampling and analysis results shall be submitted on a Compliance
Monitoring Form (GW-59), along with attached copies of laboratory analyses, on or before the last
working day of the month following the sampling month. The Compliance Monitoring Form (GW-59)
shall include this permit number, the appropriate well identification number, and one GW-59a
certification form shall be submitted with each set of sampling results. All information shall be
submitted to the following address:
Division of Water Resources
Information Processing Unit
1617 Mail Service Center
Raleigh, North Carolina 27699-1617
[15A NCAC 02T .0105(m)]
12. An annual representative soils analysis (i.e., Standard Soil Fertility Analysis) shall be conducted on
each irrigation site listed in Attachment B. These results shall be maintained at the facility for a period
of no less than five years, and shall be made available to the Division upon request. At a minimum, the
Standard Soil Fertility Analysis shall include the following parameters:
Acidity
Exchangeable Sodium Percentage
Phosphorus
Base Saturation (by calculation)
Magnesium
Potassium
Calcium
Manganese
Sodium
Cation Exchange Capacity
Percent Humic Matter
Zinc
Copper
pH
[ I SA NCAC 02T .0108(c)]
13. Noncompliance Notification:
The Permittee shall report by telephone to the Raleigh Regional Office, telephone number (919) 791-
4200, as soon as possible, but in no case more than 24 hours, or on the next working day following the
occurrence or first knowledge of the occurrence of any of the following:
a. Treatment of wastes abnormal in quantity or characteristic, including the known passage of a
hazardous substance.
b. Any process unit failure (e.g., mechanical, electrical, etc.), due to known or unknown reasons,
rendering the facility incapable of adequate wastewater treatment.
c. Any facility failure resulting in a by-pass directly to receiving surface waters.
d. Any time self -monitoring indicates the facility has gone out of compliance with its permit
limitations.
e. Ponding in or runoff from the irrigation sites.
Any emergency requiring immediate reporting (e.g., discharges to surface waters, imminent failure of
a storage structure, etc.) outside normal business hours shall be reported to the Division's Emergency
Response personnel at telephone number [phone], [phone], or [phone]. Persons
reporting such occurrences by telephone shall also file a written report in letter forth within five days
following first knowledge of the occurrence. This report shall outline the actions taken or proposed to
betaken to ensure the problem does not recur. [15A NCAC 02T .0105(1), 02T .0108(b)(1)]
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V. INSPECTIONS
1. The Permittee shall provide adequate inspection and maintenance to ensure proper operation of the
wastewater treatment and irrigation facilities. [15A NCAC 02T .0108(b)]
2. The Permittee or their designee shall inspect the wastewater treatment and irrigation facilities to prevent
malfunctions, facility deterioration and operator errors resulting in discharges, which may cause the
release of wastes to the environment, a threat to human health or a public nuisance. The Permittee shall
maintain an inspection log that includes, at a minimum, the date and time of inspection, observations
made, and any maintenance, repairs, or corrective actions taken. The Permittee shall maintain this
inspection log for a period of five years from the date of the inspection, and this log shall be made
available to the Division upon request. [15A NCAC 02T .0108(b)]
3. Any duly authorized Division representative may, upon presentation of credentials, enter and inspect
any property, premises or place on or related to the wastewater treatment and irrigation facilities
permitted herein at any reasonable time for the purpose of determining compliance with this permit;
may inspect or copy any records required to be maintained under the terms and conditions of this permit,
and may collect groundwater, surface water or leachate samples. [G.S. 143-21.5.3(a)(2)]
VT. GENERAL CONDITIONS
1. Failure to comply with the conditions and limitations contained herein may subject the Permittee to an
enforcement action by the Division in accordance with North Carolina General Statutes 143-215.6A to
143-215.6C. [G.S. 143-215.6A to 143-215.6C]
2. This permit shall become voidable if the permitted facilities are not constructed in accordance with the
conditions of this permit, the Division approved plans and specifications, and other supporting
documentation. [ 15A NCAC 02T .0110]
3. This permit is effective only with respect to the nature and volume of wastes described in the permit
application, Division approved plans and specifications, and other supporting documentation. No
variances to applicable rules governing the construction or operation of the permitted facilities are
granted, unless specifically requested and approved in this permit pursuant to 15A NCAC 02T .0105(n).
[G.S. 143-21.5.11
4. The issuance of this permit does not exempt the Permittee from complying with any and all statutes,
rules, regulations, or ordinances, which may be imposed by other jurisdictional government agencies
(e.g., local, state, and federal). Of particular concern to the Division are applicable river buffer rules in
15A NCAC 02B .0200; erosion and sedimentation control requirements in 15A NCAC Chapter 4 and
under General Permit NCG010000; any requirements pertaining to wetlands under 15A NCAC 02B
.0200 and 02H .0500; and documentation of compliance with Article 21 Part 6 of Chapter 143 of the
General Statutes. [15A NCAC 02T .0105(c)(6)]
In the event the permitted facilities change ownership or the Permittee changes their name, a formal
permit modification request shall be submitted to the Division. This request shall be made on official
Division forms, and shall include appropriate property ownership documentation and other supporting
documentation as necessary. The Permittee of record shall remain fully responsible for maintaining
and operating the facilities permitted herein until a permit is issued to the new owner. [15A NCAC
02T .0104]
6. The Permittee shall retain a set of Division approved plans and specifications for the life of the facilities
permitted herein. [15A NCAC 02T .0108(b)(1)]
7. The Permittee shall maintain this permit until all permitted facilities herein are properly closed or
permitted under another permit issued by the appropriate permitting authority. [I 5A NCAC 02T
.01056)]
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8. This permit is subject to revocation or unilateral modification upon 60 days notice from the Division
Director, in whole or part for the requirements listed in 15A NCAC 02T .0110. [ 15A NCAC 02T .0110]
9. Unless the Division Director grants a variance, expansion of the permitted facilities contained herein
shall not be granted if the Permittee exemplifies any of the criteria in 15A NCAC 02T .0120(b). [ 15A
NCAC 02T .0120]
10. The Permittee shall pay the annual fee within 30 days after being billed by the Division. Failure to pay
the annual fee accordingly shall be cause for the Division to revoke this permit. [15A NCAC 02T
.0105(e)(3)]
Permit issued this the 2' day of March 2017
NORTH CAROLINA ENVIRONMENTAL MANAGEMENT COMMISSION
S. Jay Zimmerman, P.G., Director
Division of Water Resources
By Authority of the Environmental Management Commission
Permit Number WQ0007026
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ATTACHMENT A — LIMITATIONS AND MONITORING REQUIREMENTS
Permit Number: WQ0007026 Version: 4.0
PPI 001— WWTF Effluent
EFFLUENT CHARACTERISTICS
EFFLUENT LIMITS
MONITORING REQUIREMENTS
PCs
Code
Parameter Description
Units of
Measure
Monthly
Average
Monthly
Geometric Mean
Daily Minimum
Daily Maximum
Measurement
Frequency
Sample
Type
00310
BOD, 5-Day (20 °C)
mg/L
4 x Year
Grab
00940
Chloride (as Cl)
mg/L
3 x Year z
Grab
50060
Chlorine, Total Residual
mg/L
Weekly
Grab
31616
Coliform, Fecal MF, M-FC Broth, 44.5 °C
#/100 mL
—
4 x Year
Grab
50050
Flow, in conduit or thru treatment plant
GPD
15.720
Continuous
Recorder
00610
Nitrogen, Ammonia Total (as N)
mg/L
4 x Year
Grab
00625
Nitrogen, Kjeldahl, Total (as N)
mg/L
4 x Year
Grab
00620
Nitrogen, Nitrate Total (as N)
mg/L
4 x Year
Grab
00400
pH
sn
Weekly
Grab
00665
Phosphorus, Total (as P)
mg/L
4 x Year
Grab
70300
Solids, Total Dissolved — 180 °C
mg/L
3 x Year z
Grab
00530
Solids, Total Suspended
mg/L
-:::t:::
4 x Year'--j
Grab
1. 4 x Year sampling shall be conducted in March, June, September, and December.
2. 3 x Year sampling shall be conducted in Match, June and September.
WQ0007026 Version 4.0 Attachment A Page I of 1

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ATTACHMENT B - APPROVED LAND APPLICATION SITES AND LBUTATIONS
Sanford Health & Rehabilitation Co. — Sanford Health & Rehabilitation
Permit Number: WQ0007026 Version: 4.0
IRRIGATION AREA INFORMATION
APPLICATION LIMITATIONS
Field
Owner
County
Latitude
Longitude
Net
Dominant
Parameter
Hourly
Yearly
Units
Acreage
Soil Series
Rate
Max
1
Ammons Farmland, LLC
Lee
35.5666310
-79.1221280
8.0
01284 — Non -Discharge Application Rate
0.25
30.16
inches
1. Sanford Health and Rehabilitation Co. has a lease agreement with Ammons Farmland, LLC. for the use of Field 1 (Lease Agreement attached).
WQ0007026 Version 4.0 Attachment B Page 1 of 1

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ATTACHMENT C — GROUNDWATER MONITORING AND LIMITATIONS
Monitoring wells: MW-1, MW-4, and NM-5
Permit Number: WQ0007026 Version: 4.0
GROUNDWATER CHARACTERISTICS
GROUNDWATER STANDARDS
MONITORING REQUIREMENTS
PCS Code
Parameter Description
Daily Maximum
Frequency Measurement
Sample Type
Footnotes
00680
Carbon, Tot Organic (TOC)
mg/L
3 x Year
Grab
1,6
00940
Chloride (as Cl)
250
mg/L
3 x Year
Grab
I
31616
Coliform, Fecal MF, M-FC Broth, 44.5 °C
#/I00 mL
3 x Year
Grab
1
00610
Nitrogen, Ammonia Total (as N)
1.5
mg/L
3 x Year
Grab
1
00620
Nitrogen, Nitrate Total (as N)
10
mg/L
3 x Year
Grab
1
00400
pH
6.5-8.5
su
3 x Year
Grab
1,2
00665
Phosphorus, Total (as P)
mg/L
3 x Year
Grab
1
70300
Solids, Total Dissolved -190 °C
500
mg/L
3 x Year
Grab
1
GWVOC
Volatile Compounds (GCIMS)
Present: Yes/No
Annually
Grab
1, 4, 5
82546
Water Level, Distance from measuring point
feet
3 x Year
Calculated
1, 2, 3
1. 3 x Year monitoring shall be conducted in March, June & September; Annual monitoring shall be conducted every September.
2. The measurement of water levels shall be made prior to purging the wells. The depth to water in each well shall be measured from the surveyed point on the top of the casing. The measurement of
pH shall be made after purging and prior to sampling for the remaining parameters.
3. The measuring points (top of well casing) of all monitoring wells shall be surveyed to provide the relative elevation of the measuring point for each monitoring well. The measuring points (top of
casing) of all monitoring wells shall be surveyed relative to a common datum.
4. Volatile Organic Compounds (VOC) - In September only, analyze by one of the following methods:
a. Standard Method 6230D, PQL at 0.5 µg/L or less
b. Standard Method 6210D, PQL at 0.5 µg/L or less
c. EPA Method 8021, Low Concentration, PQL at 0.5 µg/L or less
d. EPA Method 8260, Low Concentration, PQL at 0.5 µg/L or less
e. Another method with prior approval by the Water Quality Permitting Section Chief
Any method used must meet the following qualifications:
a. A laboratory must be DWR certified to run any method used.
b. The method used must, at a minimum, include all the constituents listed in Table VIII of Standard Method 6230D.
c. The method used must provide a PQL of 0.5 µg/L or less that must be supported by laboratory proficiency studies as required by DWR. Any constituents detected above the MDL but below
the PQL of 0.5 µg/L must be qualified (estimated) and reported.
5. If any volatile organic compounds (VOC) are detected as a result of monitoring as provided in Attachment C, then the Raleigh Regional Office supervisor, telephone number [phone], must
be contacted immediately for further instructions regarding any additional follow-up analyses required.
6. If TOC concentrations greater than 10 mg/L are detected in any downgradient monitoring well, additional sampling and analysis must be conducted to identify the individual constituents comprising
this TOC concentration. If the TOC concentration as measured in the background monitor well exceeds 10 mg/L, this concentration will be taken to represent the naturally occurring TOC
concentration. Any exceedances of this naturally occurring TOC concentration in the downgradient wells shall be subject to the additional sampling and analysis as described above.
Monitoring wells shall be reported consistent with the nomenclature and location information provided in Figure 2 and this attachment.
WQ0007026 Version 4.0 Attachment C Page 1 of 1

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Sanflo7d
Pi-E llIBILI 111 Tl O l+
2702 Farrell Road - Sanford, NC 27330
[phone] - Fax: [phone]
Admissions Cell: [phone]
w ww-sa nstonehea lth.com
December 6, 2016
RE: Disposal of Wastewater Agreement
RECEIVED! '00E 01MNIR
DEC � 9 Z.M6
Water Quality
permitting Section
RECEIVEDINCDEUDWR
,BAN — 5 Z017
Non -Discharge
permitting Un
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
otherwise 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.
Date: /A-19 - / 4
By: Christine P. Ammons
Representing: Pine Ridge Holdings, LLC
Date: 1,;[ - /.Z — /4
By: Christine P. Ammons
Representing: Ammons Farmland, LLC
C - Date: 12/14/16
By: Christopher J. Sprenger, President
Representing: Sanford Health and Rehabilitation

NORTH CAROLINA
LEE COUNTY
LEASE AGREEMENT
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 31st 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 1 " 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
N

31 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 31 S', 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 4Ih 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).
3. CARE AND MAINTENANCE OF PREMISES
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 termination 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.
4. BUILDING CONTENTS
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
12

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.
5. ADDITIONAL BEDS
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.
6. TRANSFER OF 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 mattcrs.
0

S. 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.
9. ASSIGNABILITY
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.
10. NON COMPETE
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 5
months after termination of this lease.
11. DESTRUCTION OR DAMAGE
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 an 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.

13. ENTRY AND INSPECTION
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.
14. HOLDING OVER
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.
15. WAIVER
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.
Oj

16. TENANT ALTERATIONS OR IMPROVEMENTS
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 term hereinabove provided.
18. CONDEMNATION
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 right 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.
19. REPOSSESSION
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 attorneys 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 or relet said premises to the
best advantage and for the highest rent reasonably available.
20. TERMINATION
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,
12

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 right 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 nonperformance 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 terms 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 terms 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.
23. TERMINATION BY BANKRUPTCY
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 terminate this lease and immediately
take possession of the Leased Premises.
24. SUBORDINATION — ATTORNMENT
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 attorn 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 Ioss 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; (ii) 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 requirements of this Article 26. Such Audits shall be conducted in such
manner as to minimize the interference with Tenant's permitted 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 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,
27. OPTION TO EXTEND LEASE
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 terms 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 terns 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 terms 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
[W

default under this provision and release the Landlord therefrom to sell the Leased Premises to a third
ply.
29. ATTORNEY'S FEES
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.
IN 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,LLC
LANDLORD
BY:.-
Narne�`*-r
Title
BY:
Name
Title
SANFORD HEALTHCARE
AND REHABILITATION
CHRISTOPHER
SPRENGER/MIKE DeLOACH
TENANT
BY:
Christopher S engerI President/1 rer
BY:
Michael DeLoach, Vice President/Secretary
?1