McFarland City Council
December 15, 2025

MCFARLAND CITY COUNCIL
McFarland Successor Agency, McFarland Public Finance Authority, McFarland Improvement Authority, McFarland Parking Authority Special Meeting Notice and Agenda
Council Chambers
103 W. Sherwood Ave, Mcfarland, CA
Website: https://www.mcfarlandcity.org/
Monday, December 15, 2025
5:00 PM
SAUL AYON, Mayor
RICARDO CANO, Vice Mayor
MARTIN GUTIERREZ, Council Member
ANITA GONZALEZ, Council Member
MARÍA T. PÉREZ , Council Member
VIEW THE MEETING RECORDINGS ONLINE at www.mcfarlandcity.org/AgendaCenterRecordings will be available approximately one week following the meeting.

HOW TO SUBMIT PUBLIC COMMENTS: The meetings of the City Council and all municipal entities, commissions, and boards (“the City”) are open to the public. At regularly scheduled meetings, members of the public may address the city on any item listed on the agenda, or on any non-listed matter over which the city has jurisdiction. At special or emergency meetings, members of the public may only address the city on items listed on the agenda. There is a time limitation of two minutes per person. For any item that is not on the agenda and within the jurisdiction or interest of the city, please come to the podium at this time. The Brown Act does not permit any action or discussion on items not listed on the agenda. If you wish to speak regarding a scheduled agenda item, please come to the podium when the item number and subject matter are announced, and the mayor opens Public Comment on the item. When recognized, please begin by providing your name and address for the record (optional). Anyone wishing to submit written information at the meeting needs to furnish ten (10) copies to the City Clerk in advance to allow for distribution to City Council, staff, and the media.

Willful disruption of the meeting shall not be permitted. If the Mayor finds that there is in fact willful disruption of any City Council Meeting, he/she may order the disrupting parties out of the room and subsequently conduct the City’s business without them present.

PUBLIC ACCOMMODATIONS: The City of McFarland does not discriminate based on disability and complies with the provisions of the Americans with Disabilities Act (ADA). If you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (661) 792-3091 at least 48 hours prior to the meeting to make reasonable arrangements to ensure accessibility to this meeting.

INTERPRETATION: If you need an interpretation of your communications to the City Council into English, please contact the City Clerk Department at 661-792-3091 ext. 2135 at least 48 hours prior to the meeting.

CALL TO ORDER: Mayor Saul Ayon
ROLL CALL:

Mayor/Chair, Saul Ayon

Vice Mayor/Vice-Chair, Ricardo Cano
Council Member/Board Member, Martin Gutierrez
Council Member/Board Member, Anita Gonzalez
Council Member/Board Member, María T. Pérez

APPROVE AGENDA AS TO FORM
INVOCATION: Councilmember Gonzalez
PLEDGE OF ALLEGIANCE: Vice Mayor Cano

DEPARTMENTAL REPORTS
CONSENT AGENDA: The Consent Agenda consists of items that in staff’s opinion are routine and non-controversial. These items are approved in one motion unless a Council Member/ Board Member or Member from the Public requests to remove a particular item.

PUBLIC HEARINGS

ADMINISTRATIVE AGENDA

1. Approval of Resolution No. 2025-163 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF MCFARLAND APPROVING A LEASE AGREEMENT FOR CITY OWNED

PROPERTY ON FRONTAGE ROAD

2. Approval of Resolution No. 2025-164 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF MCFARLAND APPROVING A LAND LEASE AGREEMENT WITH THE

MCFARLAND RECREATION & PARK DISTRICT FOR THE PUBLIC SWIMMING POOL

FACILITIES

3. Approval of Resolution No. 2025-165 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF MCFARLAND APPROVING THE EMPLOYMENT AGREEMENT BETWEEN

THE CITY OF MCFARLAND AND ADRIAN OLMOS FOR THE POSITION OF CHIEF OF POLICE
PUBLIC COMMENT: Members of the public wishing to address the Council about any item not on the agenda may do so at this time. Speakers are limited to two minutes for each person. Fifteen minutes total will be allowed for any one subject. Please state your name and address for the record prior to making a presentation.

COUNCIL COMMENTS
COUNCIL STATEMENTS AND REPORTS:

On their own initiative, Council Members may make a brief announcement or a brief report on their own activities. In addition, Council Members may ask a question of staff or the public for clarification on any matter, provide a reference to staff or other resources for information. Alternatively, request staff to report to the City Council at a later meeting concerning any matter. Furthermore, the City Council, or any member thereof, may take action to direct staff to place a matter of business on a future agenda.

CLOSED SESSION

ADJOURNMENT

This is to certify this agenda was posted at McFarland City Hall on December 12, 2025.

Paul Saldana, Deputy City Clerk
Diego Viramontes, City Manager
Next Meeting: Regular City Council January 14, 2026
The City of McFarland does not discriminate based on disability and complies with the provisions of the Americans with Disabilities Act (ADA). If you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (661) 792-3091 at least 48 hours prior to the meeting to make reasonable arrangements to ensure accessibility to this meeting. Special meeting needs hour change
All agenda item and/or supporting documentation is available for public review on the city website at www.mcfarlandcity.org and the office of the City Clerk of the City of McFarland, at 401 W, Kern Ave.

McFarland, CA 93250 during regular business hours of 8:00 am – 5:00 pm Monday through Friday, following the posting of the agenda. Any supporting documentation related to an agenda item for an open session of any regular meeting that is distributed after the agenda is posted and prior to the meeting will also be available for review at the same location and available at the meeting.

City of McFarland
City Council Meeting

STAFF REPORT
Agenda Item No. 1.

Section: ADMINISTRATIVE
AGENDA
Meeting Date: December 15,
2025
TO: Honorable Mayor and Council Members
FROM: Diego Viramontes, City Manager
Paul Saldaña , Economic Development Manager
SUBJECT: Approval of Resolution No. 2025-163 A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF MCFARLAND APPROVING A LEASE

AGREEMENT FOR CITY OWNED PROPERTY ON FRONTAGE ROAD
SUMMARY:

Norman Yousif has proposed to lease City owned property on Frontage Road to construct a gas station, convenience store and additional retail space. The proposed lease would start at $1,000 per month and increase each year. The developer would also have the option to purchase the property six (6) months after a certificate of completion is issued for the development. In the event that the development does not occur, the City retains the right to cancel the lease and pursue other options.

The proposed lease does not include the property currently leased to the Gym or the residential zoned property located to the west. The developer would also design the project to include some spaces for food truck vendors. The final development plan is subject to site plan and potentially a Conditional Use Permit and would be subject to a development agreement since it is city owned property.

FINANCIAL IMPACT:
$12,000 in additional revenue to the City from the lease during the first year and escalating each successive year. In the event the purchase option would be excercised, the City would receive $431,034 (or higher depending on when the option is exercised) in one-time revenue.

RECOMMENDATION:

Council approve Resolution No 2025-163.

ATTACHMENTS:

1. Exhibit A Lease Agreement

2. Exhibit B Option Agreement

RESOLUTION NO. 2025-163

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MCFARLAND APPROVING A

LEASE AGREEMENT FOR CITY OWNED PROPERTY ON FRONTAGE ROAD WHEREAS, The City is the owner of property on Frontage Road; and WHEREAS, Norman Yousif has proposed the development of a retail commercial center on the city owned property; and
WHEREAS, the City desires to facilitate the development of the property through a lease and purchase option agreements.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of McFarland that it hereby finds and determines as follows:

1. The lease agreement and option agreement are approved, subject to final review of the City Attorney for non-substantive changes.

2. The City Manager or designee is authorized to consent to minor non-subsntative changes to the agreement.

3. This resolution becomes effective immediately.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of McFarland on December 15, 2025 by the following vote:

Aye Nae Abstain Absent
Saul Ayon
Ricardo Cano
Anita Gonzalez
María T. Pérez
Martin Gutierrez

CITY OF MCFARLAND
____________________________
Saul Ayon, Mayor

ATTEST:
_____________________________
Erika De La Cruz, City Clerk
I, _________________________, City Clerk of the City of McFarland, California, DO HEREBY CERTIFY that the foregoing resolution is a true and accurate copy of the Resolution passed and adopted by the City Council of the City of McFarland on the date and by the vote indicated herein.

APPROVED AS TO FORM:
_____________________________
Nathan Hodges, City Attorney

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LEASE
by and between
Norman Yousif
as Lessee
and
City of McFarland,
as Lessor

TABLE OF CONTENTS
Page
-i1. Definitions ..........................................................................................................................1

2. Lease of Property................................................................................................................1

2.1 Property; Title.........................................................................................................1

3. Lease Provisions.................................................................................................................2

3.1 Permitted Use; Compliance with Legal Requirements...........................................2

3.2 Term........................................................................................................................3

3.2.1 Initial Term.................................................................................................3

3.2.2 Option to Extend.........................................................................................3

3.2.3 Expiration; No Holdover ............................................................................3

3.2.4 Early Termination.......................................................................................3

3.3 Permits....................................................................................................................3

3.4 Rent.........................................................................................................................4

3.4.1 Late Payment ..............................................................................................4

3.5 Lessee Insurance.....................................................................................................4

3.6 Lessor Insurance .....................................................................................................4

3.7 Indemnification.......................................................................................................4

3.8 Limit of Liability ....................................................................................................4

3.9 Consequential Damages..........................................................................................4

3.10 Assignment and Sublease; Non-Disturbance..........................................................5

3.10.1 Assignment and Subleases by Lessee.........................................................5

3.10.2 Assignments by Lessor...............................................................................5

3.10.3 Non-Disturbance Lease-Future Lenders.....................................................5

3.11 Inspection and Access.............................................................................................6

3.12 Surrender of Property .............................................................................................6

3.13 Hazardous Materials...............................................................................................6

3.14 Events of Default ....................................................................................................8

3.14.1 Lessee Event of Default..............................................................................8

3.14.2 Lessor Event of Default..............................................................................8

3.15 Actions in Case of Default......................................................................................9

3.15.1 For Lessor...................................................................................................9

TABLE OF CONTENTS
(continued)
Page
-ii3.15.2 For Lessee...................................................................................................9

4. Miscellaneous...................................................................................................................10

4.1 Construction of Certain Terms and Phrases .........................................................10

4.2 Amendments.........................................................................................................11

4.3 Taxes.....................................................................................................................11

4.4 Headings...............................................................................................................11

4.5 Binding Effect.......................................................................................................12

4.6 Memorandum of Lease; Fixture Filing.................................................................11

4.7 No Brokers............................................................................................................12

4.8 Waiver...................................................................................................................12

4.9 Remedies Cumulative...........................................................................................12

4.10 Notices..................................................................................................................12

4.11 Severability...........................................................................................................13

4.12 No Third Party Beneficiary ..................................................................................13

4.13 Quiet Enjoyment...................................................................................................13

4.14 Choice of Law.......................................................................................................13

4.15 Dispute Resolution................................................................................................14

4.16 Further Assurance.................................................................................................14

4.17 Counterparts..........................................................................................................14

4.18 Entire Lease ..........................................................................................................14

4.19 No Merger.............................................................................................................14

4.20 Time......................................................................................................................14

4.21 Business Day ........................................................................................................15

4.22 Accord & Satisfaction...........................................................................................15

4.23 No Partnership ......................................................................................................15

4.24 Survival.................................................................................................................15

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LAND LEASE
This LEASE AGREEMENT (the "Lease") is made and entered into as November 1, 2025 (the "Effective Date"), by and between the City of McFarland, a California Municipal Corporation organized and existing under the laws of the State of California (“Lessor”), and Norman Yousif, a sole proprietorship (“Lessee”). Lessee and Lessor are sometimes hereinafter individually referred to as a “Party” and collectively as the “Parties.” The lease transaction contemplated by this Lease is hereinafter referred to as the “Transaction.”

RECITALS
A. Lessor is the owner of that certain real property and building commonly known as Parcel 4 and Parcel 3 of Westing Tentative Parcel Map 12463, being a portion of APN 201-031- 04, McFarland, CA 93250, and more particularly shown on Exhibit A attached hereto (the “Property”).

B. Lessor desires to lease to Lessee the Property, and Lessee desires to lease the Property from Lessor for the purpose of operation of retail center on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and Leases herein contained, the Parties hereto agree upon the following terms and conditions.

LEASE

1. Definitions. Unless otherwise required by the context in which any term appears, capitalized terms used in this Lease shall have the respective meanings set forth in Exhibit B – GLOSSARY OF TERMS, attached hereto.

2. Lease of Property.

2.1 Property; Title.
(a) The lease of the Property to Lessee for the Permitted Use shall commence in accordance with the Rent requirements set forth in Section 3.4 and Section 4.2. (b) Lessor represents that as of the date hereof:
(i) Lessor has lawful title to the Property and full right to enter into this Lease;
(ii) Lessor is organized and existing under the laws of the State of California and has all requisite powers and all authorizations required to own and operate the Property;

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(iii) Lessor has obtained all third-party approvals and consents (if any) required to enter into this Lease and perform its obligations hereunder; (iv) Property is free from any mortgages, liens and encumbrances and rights of third parties that could materially and adversely affect Lessee's right to use and occupy the Property, other than (1) no other Lessees have any right to enter, occupy or use the Property without Lessor's prior approval (which approval shall be exercised in a manner consistent with the rights of Lessee under this Lease so as to avoid any interference with or disturbance of Lessee’s operation.
(v) Lessor is not a party to, or bound as a successor-in-interest to, or assignee of, a party to, any covenants, conditions, encumbrances, leases, Leases, or use restrictions that prevent or materially restrict the construction, installation or operation of the Permitted Use on the Property; and Lessor warrants there are no existing covenants, conditions, encumbrances, leases, or use restrictions to which it is not a party or bound by that will prevent or materially restrict Lessees use of the Property during the term of the Lease.

3. Lease Provisions.

3.1 Permitted Use; Compliance with Legal Requirements.
(a) Lessee shall use the Property solely for retail center (the “Permitted Use”) and a Gas Station and shall not use or permit the Property to be used for any other use or purpose whatsoever without Lessor’s prior written (which approval shall not be unreasonably withheld, delayed or conditioned).
(b) Lessee shall procure, at its sole cost and expense, any and all permits required for Lessee’s use and occupancy of the Property.

3.2 Term.

3.2.1 Initial Term. The initial Term of this Lease shall twenty (20 years, and shall begin upon the Effective Date of this Agreement and shall expire on the last day of the 240th month.

3.2.2 Option to Extend. The parties hereto may elect to extend this Agreement upon such terms and conditions as may be agreed upon in writing and signed by the parties at the time of any such extension. Should Lessee desire such an extension, Lessee agrees to provide notice to Lessor requesting such an extension, along with the proposed terms of the extension, at least 90 days prior to the expiration of this Agreement.

3.2.3 Expiration; No Holdover. Upon the expiration of the initial Term and all applicable Renewal Terms, this Lease shall automatically expire and Lessee shall vacate the Property.

3.2.4 Early Termination. Lessee, at its sole and absolute discretion, shall have the right to terminate this Lease at any time and for any reason during the Term, effective upon six (6) months’ prior written notice to Lessor. Upon such termination, except for rights and

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obligations that expressly survive termination as set forth herein, neither party shall have any further liability under this Lease.

3.3 Permits. Lessee hereby agrees to obtain and keep in full force and effect for the duration of this Lease all Permits necessary for the installation, operation of the Permitted Use at its own cost and expense. Lessor hereby consents to any action taken by Lessee in applying for any and all such Permits, and to the extent necessary or convenient, agrees to join or otherwise acknowledge any application or filing for the same.

3.4 Rent. Commencing on the Effective Date, Lessee agrees to pay Rent to Lessor, in advance, on the first day of the month in accordance with the following schedule:

Months 1-12: $1,000.00
Months 13-24: $1,500.00
Months 25-36: $1,650.00
Months 37-48: $1,800.00
Months 49-60: $1,950.00
Months 61-72: $2,100.00
Months 73-240: Rent shall increase each year based on the Consumer Price Index for All Urban Consumers (CPI-U) for the Los Angeles-Long BeachAnaheim Area. Notwithstanding the preceding sentence, the annual increase shall be not less than 2% nor greater than 4% per year.

3.4.1 Late Payment. If Lessee is delinquent by ten (10) or more calendar days after the date such payment of Rent or any other amount was due and payable under this Lease, Lessee shall pay to Lessor on demand a late payment charge equal to two (2%) of such delinquent sum.

3.5 Lessee Insurance. Lessee shall, at Lessee’s sole cost and expense, maintain during the Term, beginning with the Commencement of Construction, the insurance coverage described on Exhibit C attached hereto.

3.6 Lessor Insurance. Lessor shall, at Lessor’s sole cost and expense, maintain during the Term and beginning with any Commencement of Construction, the insurance coverage described on Exhibit C attached hereto.

3.7 Indemnification. Lessor and Lessee hereto agree to indemnify, defend, and hold the other harmless from and against any and all liability, loss, expense, attorneys’ fees, or claims for injury and/or damages arising from or in any way connected to the performance of this Lease but only in proportion and to the extent such liability, loss, expenses, attorneys’ fees, or claims for injury or damages caused by or result from the negligent or intentional acts or omissions of the

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indemnifying Party, its officers, agents or employees in or about the Property. The duties described in this Section 3.7 apply as of the Effective Date of this Lease and survive the termination thereof.

This indemnity does not cover claims arising from the presence or release of Hazardous Materials subject to Section 3.13 of this Lease.

3.8 Limit of Liability. To the maximum extent permitted by law, Lessor agrees to limit the Lessee’s liability for any and all claims, losses, costs, damages of any nature whatsoever or claims expenses from any cause or causes, including attorneys’ fees and costs and expert-witness fees and costs, so the total aggregate liability of the Lessee to the Lessor shall not exceed the outstanding amounts of the Rent due under the Term of the Lease. This limitation shall apply regardless of the cause of action or legal theory pled or asserted. The duties described in this Section 3.8 apply as of the Effective Date of this Lease and survive the termination thereof.

3.9 Consequential Damages. Notwithstanding any other provision of this Lease, and to the fullest extent permitted by law, neither the Lessor nor the Lessee, their respective officers, directors, partners, employees, contractors or subcontractors shall be liable to the other or shall make any claim for any incidental, indirect or consequential damages arising out of or connected in any way to this Lease. This mutual waiver of consequential damages shall include, but is not limited to, loss of use, loss of profit, loss of business, loss of income, loss of reputation or any other consequential damages that either Party may have incurred from any cause of action including negligence, strict liability, breach of contract and breach of strict or implied warrantee.

The duties described in this Section 3.9 apply as of the Effective Date of this Lease and survive the termination thereof.

3.10 Assignment and Sublease; Non-Disturbance.

3.10.1 Assignment and Subleases by Lessee. Except as provided below, Lessee may assign this Lease and its rights and obligations under this Lease or sublet the Property leased by Lessee, only with the prior written consent of Lessor, which consent may not be unreasonably withheld, conditioned or delayed.

Notwithstanding the foregoing, Lessee may assign this Lease or any of its rights and obligations under this Lease, or sublet the Property leased by Lessee (provided, however, that any such assignee or sublease pursuant to clause (i) through clause (iv) below shall agree to accept the terms and conditions of this Lease and that any sublease shall be subject to the provisions of this Lease):
(a) to one or more of its Affiliates (including, without limitation, a special– purpose entity which is an Affiliate of the Lessee;
(b) to any entity acquiring or succeeding to all or substantially all of the assets of Lessee;
(c) to a successor entity in a merger, consolidation or acquisition transaction with Lessee; or

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(d) to one or more lenders or other third parties in connection with a financing and/or sale-leaseback or lease-sublease back transaction.

Lessee shall notify Lessor of any assignment of this Lease or of its rights or obligations under this Lease and of any sublease. Except in the event of sublease, the assigning Lessee shall be released and discharged from all obligations of Lessee as of the date of assignment of this Lease.

3.10.2 Assignments by Lessor. All obligations of Lessor under this Lease will be binding upon Lessor only during the period of its ownership of the Property and not thereafter.

The term “Lessor” in this Lease shall mean only the current owner of the Property. In the event of a transfer by such owner of its interest in the Property and the assumption of this Lease by a subsequent owner of the Property, such transferring owner shall thereupon be released and discharged from all obligations of Lessor hereunder thereafter accruing, but such obligations shall be binding during the Term upon each new owner for the duration of such owner’s ownership of the Property. Lessor shall not assign its interest under this Lease separately from its ownership of the Property. Any purchaser or other transferee of Lessor’s interest in the Property shall acquire such interest and by acquiring Lessor’s interest in the Property, shall be deemed to have accepted and assumed all the rights and obligations of Lessor under this Lease.

3.10.3 Non-Disturbance Lease-Future Lenders. The Parties intend that this Lease, and the rights of Lessee hereunder (including, without limitation, Lessee's rights under this Lease, and all rights of Lessee with respect to the Security) shall be superior, and not subject or subordinate, to any future lien, charge, mortgage or security interest in or on the Property.

Notwithstanding the foregoing, if this Lease and the rights of Lessee hereunder shall be subject and subordinate to any such future lien, charge, mortgage or security interest in or on the Property by operation of law, or if the holder of any such future lien, charge, mortgage or security interest in or on the Property (each a "Future Lender") shall require the subordination of this Lease to the lien of such future lien, charge, mortgage or security interest in or on the Property, Lessee shall not be obligated to subordinate its rights and interests hereunder unless such Future Lender enters into a non-disturbance Lease with Lessee. Lessee agrees to use good faith efforts to agree upon a non-disturbance Lease with any such Future Lender.

3.11 Inspection and Access.
(a) In the event of an emergency, Lessor and its agents, representatives, contractor or designees, shall be allowed full and immediate access to the Property without being subject to the notification and other limitations referenced in Section 3.11(b) below. (b) Lessor and its agents, representatives, contractors or designees, shall, upon at least twenty-four (24) hours prior written notice to the Lessee (which written notice may be made by email to Lessee), be permitted to access the Property at any time to inspect and maintain the Property for any business purpose (including, but not limited to, security); provided that Lessor be accompanied by a Lessee Representative at all times; and, will avoid interference with Lessee’s operations (except to an immaterial degree, and then only to the minimum extent necessary), and agrees to cooperate with and assist Lessee in preventing such interference by such other Persons.

Lessor and such other Persons shall use all reasonable efforts to not disturb Lessee’s operations during such access.

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3.12 Surrender of Property. Upon the expiration or termination of this Lease pursuant to the provisions hereof, Lessee shall quit and surrender the Property to Lessor in good order, condition and repair in accordance with the provisions of this Section 3.12. Provided Lessor is not in default under this Lease beyond any applicable cure, such surrender of the Property and removal of any personal property shall be accomplished at Lessee’s sole cost and expense. If Lessor is in default under this Lease beyond any applicable cure period, the Lessee’s expenses incurred in the surrender of the Property including damages and removal of personal property shall be a recoverable expense. On a mutually convenient date, but in no case later than thirty (30) days after the termination or expiration of this Lease, Lessee shall remove from the Property all personal property in a similar condition, and return such property to Lessor, reasonable wear and tear and loss by casualty or other causes beyond Lessee’s reasonable control excepted.

3.13 Hazardous Materials. Except for Hazardous Materials contained in products used by Lessee in de minimis quantities for ordinary cleaning purposes,), Lessee agrees not to cause or permit any Hazardous Materials to be brought upon, stored, used, handled, generated, released or disposed of on, in, under or about the Property, or any other portion of the Property by Lessee, its agents, officers, directors, shareholders, members, managers, partners, employees, subleases, assignees, licensees, contractors or invitees (collectively, "Lessee’s Parties"), without the prior written consent of Lessor, which consent Lessor may withhold in its sole and absolute discretion.

Hazardous Materials shall not include ordinary office supplies and repair, maintenance and cleaning supplies maintained in reasonable and necessary quantities and used in accordance with all Environmental Laws, or natural gas or fuel required in the ordinary course for the operation of the Gas Station Facility Premises or the Gas Station Fueling Station Property maintained in reasonable and necessary quantities and used in accordance with all Environmental Laws (“NonHazardous Materials”). As used in this Article, “Environmental Laws” means any and all present and future federal, state and local laws, ordinances, regulations, policies and any other requirements of any Governmental Agency relating to health, safety, the environment or to any Hazardous Materials, including without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), the Resource Conservation Recovery Act (RCRA), the Hazardous Materials Transportation Act, the Toxic Substance Control Act, the Endangered Species Act, the Clean Water Act, the Occupational Safety and Health Act, each as hereafter amended from time to lime. and the present and future rules, regulations and guidance documents promulgated under any of the foregoing. As used in this Article, “Governmental Agency” means any federal, state, municipal or other governmental or quasi-governmental court, agency, authority or district
Upon the expiration or earlier termination of this Lease, Lessee agrees to promptly remove from the Property, and the Property, at its sole cost and expense, any and all Hazardous Materials, including any equipment or systems containing Hazardous Materials which are installed, brought upon, stored, used, generated or released upon, in, under or about the Property, and/or the Property or any portion thereof by Lessee or any of Lessee's Parties. To the fullest extent permitted by law, Lessee agrees to promptly indemnify, protect, defend and hold harmless Lessor and Lessor's members, shareholders, partners, officers, directors, managers, employees, agents, contractors, successors and assigns (collectively, "Lessor Parties") from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including, without limitation, clean-up, removal, remediation and restoration costs, sums paid in

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settlement of claims, attorneys' fees, consultant fees and expert fees and court costs) which arise or result from the presence of Hazardous Materials on, in, under or about the Property, or any other portion of the Property and which are caused or permitted by Lessee or any of Lessee's Parties.

The provisions of this Section 3.13 will survive the expiration or earlier termination of this Lease.

Lessor shall indemnify, defend, and hold Lessee harmless from and against any and all losses, claims, demands, actions, suits, damages, expenses (including, without limitation, remediation, removal, repair, corrective action, or cleanup expenses), and costs (including, without limitation, actual attorneys' fees and consultant fees) which are brought or recoverable against, or suffered or incurred by Lessee as a result of the presence of Hazardous Materials on, in, under or about the Property, or any other portion of the Property and which are caused or permitted by Lessor or any Lessor Parties. The obligations of Lessor under this Section 3.13 shall survive any termination of this Lease.

Lessor further agrees to indemnify, defend and hold Lessee harmless from and against any and all losses, claims, demands, actions, suits, damages, expenses (including, without limitation, remediation, removal, repair, corrective action, or cleanup expenses), and costs, (including, without limitation, actual attorneys' fees and consultant fees) which are brought or recoverable against, or suffered or incurred by Lessee as a result of the presence of those Materials defined above as Non-Hazardous Materials on, in, under or about the Property, or any other portion of the Property and which are caused or permitted by Lessor or any Lessor Parties. The obligations of Lessor under this Section 3.13 shall survive any termination of this Lease.

Notwithstanding anything to the contrary in this Section 3.13, Lessee shall have no liability of any kind to Lessor as to Hazardous Materials on, under or about the Property caused, released or permitted by:
(a) Lessor, its agents, employees, contractors or invitees; (b) Any other Person or entity located outside of the Property; or (c) In existence as of the Effective Date whether or not caused by Lessor, its agents, employees, contractors or invitees.

Lessor represents that, to its knowledge, as of the date hereof there are no Hazardous Materials that are in violation of Environmental Requirements on the Property. If Hazardous Materials are hereafter discovered on the Property, and the presence of such Hazardous Materials is not created by Lessee, its agents, employees, contractors, subleases or invitees, and the presence of such Hazardous Materials results in any contamination, damages, or injury to the Property or otherwise adversely affects Lessee's occupancy or use of the Property or human health, Lessor shall promptly take all actions at its sole expense as are necessary to remediate such Hazardous Materials and as may be required by Environmental Requirements. Actual or threatened action or litigation by any governmental authority is not a condition prerequisite to Lessor's obligations under this paragraph. As soon as reasonably possible, and in all events no later than thirty (30) days following Lessor’s receipt of notification from Lessee supported by reasonable documentation setting forth such presence or release of Hazardous Materials, Lessor shall commence and, within a reasonable period of time, complete its own investigation to confirm such

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presence or release of Hazardous Materials. Lessor shall commence to remediate such Hazardous Materials as soon as reasonably possible, and in all events within thirty (30) days after the completion of Lessor's investigation and thereafter diligently prosecute such remediation to completion. If Lessor commences remediation pursuant to this paragraph, the Rent shall be equitably adjusted if and to the extent and during the period the Property are unsuitable for Lessee's business. However, if the time involved or delays in Lessor’s investigation or remediation of the presence or release of Hazardous Materials or the nature of such investigation or remediation could reasonably be expected to cause Lessee to be unable to utilize the Property to operate, Lessee shall have the right to terminate this Lease without any further liability or payment to Lessor upon ten (10) days notice to Lessor. In such case, Lessor and Lessee will also cooperate to attempt to find an alternative location that is suitable for Lessee’s purposes on other property owned or controlled by Lessor or its Affiliates, but Lessor makes no representation and does not provide any assurance that any such alternative location can be found or will be available. Lessor and Lessee agree that the inability to locate or agree on an alternative location will not affect the Parties’ other rights and obligations under this Lease, including Lessee’s right to terminate as provided in the previous sentence.

3.14 Events of Default.

3.14.1 Lessee Event of Default. Each of the situations set forth below shall constitute a breach of this Lease by Lessee (each a "Lessee Event of Default"), and shall entitle Lessor to exercise the remedies set forth in this Lease:
(a) Failure by Lessee to pay any installment of Rent or any other payment due hereunder, where such failure to pay continues for a period of ten (10) days after written notice of such non-payment from Lessor.
(b) Failure by Lessee to comply with any of the material provisions of this Lease and, unless otherwise expressly provided for hereunder, such failure to comply continues for more than thirty (30) days from the date on which Lessor provides written notice of such breach to Lessee; provided that such thirty (30) day period shall be extended by such longer period of time as may be reasonably necessary for Lessee to cure such breach if such breach cannot reasonably be cured within a thirty (30) day period so long as Lessee is diligently pursuing such cure.

3.14.2 Lessor Event of Default. The failure by Lessor to comply with any of the material provisions of this Lease and, unless otherwise expressly provided for hereunder, such failure to comply continues for more than thirty (30) days from the date on which Lessee provides written notice of such breach to Lessor; provided that such thirty (30) day period shall be extended by such longer period of time as may be reasonably necessary for Lessor to cure such breach if such breach cannot reasonably be cured within a thirty (30) day period so long as Lessor is diligently pursuing such cure shall constitute a breach of this Lease by Lessor (each a "Lessor Event of Default"), and shall entitle Lessee to exercise the remedies set forth in this Lease.

3.15 Actions in Case of Default.

3.15.1 For Lessor. Upon each occurrence of a Lessee Event of Default, and after expiration of all applicable notice and cure periods, Lessor may at any time subsequent to such

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breach and at its discretion exercise its rights and remedies under California Civil Code section 1951.2 or any successor statute thereto.

3.15.2 For Lessee. Upon the occurrence of a Lessor Event of Default, and after expiration of all applicable notice and cure periods, Lessee may at any time subsequent to such breach and at its discretion:
(a) terminate this Lease;
(b) specifically enforce this Lease and compel compliance by Lessor with its obligations under this Lease; and/or
(c) take such action and recover such damages as provided for at law or in equity.

4. Miscellaneous.

4.1 Construction of Certain Terms and Phrases. Unless the express usage or the context of this Lease otherwise requires: (a) words of either gender include the other gender; (b) words using the singular or plural also include the plural or singular, respectively; (c) the terms "hereof," "herein," "hereby," "hereto" and similar words refer to this entire Lease and not to any particular Article, Section, Clause, Exhibit, or Exhibit or any other subdivision of this Lease; (d) references to "Article," "Section," "Clause," or "Exhibit" are to the Articles, Sections, Clauses, and Exhibits, respectively, of this Lease; (e) the words "include" or "including" shall be deemed to be followed by "without limitation" or "but not limited to" whether or not they are followed by such phrases or words of like import; (f) references to "this Lease" or any other Lease or document shall be construed as a reference to such Lease or document, including any exhibits, appendices and schedules thereto, as amended, modified or supplemented and in effect from time to time; (g) reference to a law, regulation or ordinance includes any amendment or modification thereof; and (h) a reference to a person includes its successors and assigns. In the event of a conflict between the Exhibit and the provisions of this Lease, the latter shall prevail.

4.2 Amendments. This Lease, including all Exhibits attached hereto, contains all of the covenants, provisions, Leases, conditions and understandings between Lessor and Lessee concerning the Property and any other matter covered or mentioned in this Lease, and no prior Lease or understanding, oral or written, express or implied, pertaining to the Property or any such other matter shall be effective for any purpose. No provision of this Lease may be amended or added to except by an Lease in writing signed by the parties hereto or their respective successors in interest. The parties acknowledge that all prior Leases, representations and negotiations are deemed superseded by the execution of this Lease to the extent they are not expressly incorporated herein.

4.3 Taxes. Lessee shall pay all personal property taxes, business or license taxes or fees, excises, assessments, levies, fees or other charges which are assessed, levied, charged or imposed by any public authority against Lessee in connection with Lessee’s occupancy and use of the Property or the construction, installation, operation, maintenance, repair or replacement of the Facilities and Equipment necessary to operate the Permitted Use.

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Lessor shall be responsible for all real property taxes and assessments relating to the Property, all taxes and assessments computed upon the basis of the net income of Lessor or payments derived from the Property by Lessor, and all business or license taxes or fees, excises, assessments, levies, fees or other charges which are assessed, levied, charged or imposed by any public authority against Lessor in connection with Lessor’s lease of the Property to Lessee.

4.4 Headings. The headings in this Lease are solely for convenience and ease of reference and shall have no effect in interpreting the meaning of any provision of this Lease.

4.5 Binding Effect. This Lease and its rights, privileges, duties and obligations shall inure to the benefit of and be binding upon each of the Parties hereto, together with their respective successors and permitted assigns.

4.6 Memorandum of Lease; Fixture Filing. Lessor hereby agrees to execute within ten (10) days after receipt of Lessee's request and authorizes Lessee to record a memorandum of this Lease in the land registry or title records of the county where the Property is located or other applicable government office.

4.7 No Brokers. Each party represents and warrants to the other that it has dealt with no broker, agent or other Person in connection with this Lease and that no broker, agent or other Person brought about this Lease, and each party agrees to indemnify and hold the other harmless from and against any claims by any other broker, agent or other Person claiming a commission or other form of compensation by virtue of having dealt with the indemnifying party with regard to this Lease.

4.8 Waiver. The failure, delay or forbearance by either Party to exercise any of its rights or remedies under this Lease or to provide written notice of any default to a defaulting party will not constitute a waiver of such rights or remedies. No Party will be deemed to have waived any right or remedy resulting unless it has made such waiver specifically in writing. The waiver by either Party of any default or breach of any term, condition or provision herein contained shall not be deemed to be a waiver of any subsequent breach of the same term, condition or provision, or any other term, condition or provision contained herein.

4.9 Remedies Cumulative. No remedy herein conferred upon or reserved to Lessor or Lessee shall exclude any other remedy herein or at law, but each such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.

4.10 Notices. All Rent and other sums payable by Lessee to Lessor hereunder shall be paid to Lessor at the address set forth below, or to such other Persons and/or at such other places as Lessor may hereafter designate in writing. Any notice required or permitted to be given hereunder must be in writing and may be given by personal delivery (including delivery by nationally recognized overnight courier or express mailing service), or by registered or certified mail, postage prepaid, return receipt requested, addressed to Lessee at the address(es) or to Lessor at the address(es) designated below. Either party may, by written notice to the other, specify a different address for notice purposes. Notice given in the foregoing manner shall be deemed given (i) upon confirmed transmission if sent by facsimile transmission, provided such transmission is

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prior to 5:00 p.m. on a Business Day (if such transmission is after 5:00 p.m. on a Business Day or is on a non-business day, such notice will be deemed given on the following Business Day), (ii) when actually received or refused by the party to whom sent if delivered by a carrier or personally served or (iii) if mailed, on the day of actual delivery or refusal as shown by the certified mail return receipt or the expiration of three (3) Business Days after the day of mailing, whichever first occurs.

To Lessee: Norman Yousif
With a Copy to: Sean Maddocks
Green Consulting Partners
23 Corporate Plaza Drive, #150
Newport Beach, CA 92660
To Lessor: City of McFarland
401 W Kern Avenue
McFarland, CA 93250
Attention: City Manager
Telephone: 661-792-3091
Email:

With a copy to: Hodges Law Group
Attn: Nathan M. Hodges
1925 G Street
Bakersfield, CA 93301
Lessee shall have the right to add any lender providing financing to Lessee as a party entitled to receive copies of any Notices delivered under this Lease.

4.11 Severability. If one or more provisions of this Lease are found by a court of competent jurisdiction over the Parties hereto to be illegal, invalid or unenforceable, in whole or in part, the remaining terms and provisions of this Lease shall remain in full force and effect disregarding such illegal, invalid or unenforceable portion and such court shall be empowered to modify such illegal, invalid or unenforceable provision to the extent necessary to make this Lease enforceable in accordance with the intent or purposes of the Parties expressed in this Lease to the fullest extent practicable and as permitted by applicable by law.

4.12 No Third Party Beneficiary. This Lease is solely for the benefit of the Parties hereto and no right or cause of action shall accrue by reason hereof for the benefit of any third party not a party hereto.

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4.13 Quiet Enjoyment. Lessor warrants that Lessee shall peaceably hold and enjoy the Property and any and all other rights granted by this Lease for the entire Term without hindrance, interruption, suit, trouble or interference of any kind by Lessor or any other Person or entity claiming (whether at law or in equity) by, through or under Lessor. Lessor shall protect and defend the right, title and interest of Lessee hereunder from any other rights, interests, title and claims.

4.14 Choice of Law. This Lease shall be construed in accordance with the laws of the State of California.

4.15 Dispute Resolution. The Parties shall negotiate in good faith and attempt to resolve any dispute, controversy or claim arising out of or relating to this Lease ("Dispute") within 30 days after the date that a Party gives written notice of such Dispute to the other Party.

If, after such negotiation in accordance with Section 5.15, the Dispute remains unresolved, either Party may require that a non-binding mediation take place. In such mediation, representative of the Parties with authority to resolve the dispute shall meet with a mutually agreed upon mediator. If the Parties are unable to agree upon a mediator, then either Party is hereby empowered to request the American Arbitration Association to appoint a mediator. The mediator’s fee and expenses shall be paid one-half by each Party. If mediation is not successful, either part may allege any legal remedy available to it under this lease.

4.16 Further Assurance. Upon the receipt of a written request from the other Party, each Party shall execute such additional documents, instruments, estoppels and assurances and take such additional actions as are reasonably necessary and desirable to carry out the terms and intent hereof, including, but not limited to, an interconnection agreement. Neither Party shall unreasonably withhold, condition or delay its compliance with any reasonable request made pursuant to this Section 4.16.

In furtherance of the foregoing, each Party agrees that it shall, at any time and from time to time during the Term of this Lease and within (10) days after a written request by the other Party, execute, acknowledge and deliver to the requesting Party a written statement certifying that this Lease is unmodified and in full force and effect (or modified and stating the modifications), the dates to which the payments and any other charges have been paid, and that there are no defaults existing (or that defaults exist and stating the nature of such defaults), and stating such other facts as the requesting Party may reasonably provide. The failure of a Party to deliver any such certificate within such time shall be conclusive upon such Party that this Lease is unmodified and in full force and effect, all payments to such Party are current, there are no defaults existing, and such other facts are true and correct.

4.17 Counterparts. This Lease may be executed in counterparts, which shall together constitute one and the same Lease. Facsimile signatures shall have the same effect as original signatures and each Party consents to the admission in evidence of a facsimile or photocopy of this Lease in any court or arbitration proceedings between the Parties.

4.18 Entire Lease. This instrument represents the full and complete Lease between the Parties hereto with respect to the subject matter contained herein and supersedes all prior written

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or oral Leases between said Parties with respect to said subject matter. The exhibits attached hereto are made a part of this Lease.

4.19 No Merger. The voluntary or other surrender of this Lease by Lessee or a mutual termination thereof shall not work as a merger and shall, at the option of Lessor, either (a) terminate all or any existing subleases, or (b) operate as an assignment to Lessor of Lessee's interest under any or all such subleases.

4.20 Time. Time is of the essence with respect to performance of every provision of this Lease in which time or performance is a factor.

4.21 Business Day. A "Business Day" is Monday through Friday, excluding holidays observed by the United States Postal Service and reference to 5:00 p.m. is to the time zone of the recipient. Whenever action must be taken (including the giving of notice or the delivery of documents) under this Lease during a certain period of time (or by a particular date) that ends (or occurs) on a non-business day, then such period (or date) shall be extended until the immediately following Business Day.

4.22 Accord & Satisfaction. No payment by Lessee or receipt by Lessor of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Lessor may accept such check or payment without prejudice to Lessor's right to recover the balance of such Rent or pursue any other remedy provided in this Lease. Lessee agrees that each of the foregoing covenants and Leases shall be applicable to any covenant or Lease either expressly contained in this Lease or imposed by any statute or at common law.

4.23 No Partnership. Lessor does not, in any way or for any purpose, become a partner of Lessee in the conduct of its business, or otherwise, or joint venturer or a member of a joint enterprise with Lessee by reason of this Lease.

4.24 Survival. It is expressly agreed that the rights, duties and obligations contained in Sections 3.9, 3.10, 3.11, and 3.14 shall survive the completion or any termination of this Lease and shall remain in full force and effect.

5. OPTION TO PURCHASE.

4.24 Lessor shall have the option to purchase the Property pursuant to the terms of the Option Agreement, which shall be set forth in a separate agreement. The option to purchase shall become effective six months after completion of development of the Property, and shall expire four (4) years after completion of the development of the Property, provided Lessor has not been in default under this Lease.
[Signatures on Following Page]

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

LESSOR: LESSEE:

Norman Yousif The City of McFarland
By: By:

Title: Title:

Date: Date:

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EXHIBIT A
A portion of APN 201-031-04 shown on Vesting Tentative Parcel Map No 12463 as parcel 4, with exception of existing building and pad as shown, and parcel 3

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EXHIBIT B
Glossary of Terms
"Affiliate" of a specified Person means any Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, such specified Person. As used in this definition of Affiliate, the term "control", "controlled by" and "under common control with," means (a) the ownership, directly or indirectly, of 50% or more of the equity interest in a Person, or (b) the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. "Lease" means this Lease, in its entirety, together with its Exhibits, which are hereby incorporated by reference.
"Business Day" shall have the meaning set forth in Section 5.21 of this Lease. "Effective Date" shall have the meaning set forth in the preamble to this Lease. "Environmental Requirements" means all applicable present and future federal, state and local laws, statutes, rules, ordinances, codes and regulations relating to environmental protection, public health and safety on, under, or about the Property, including, without limitation, the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9600 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11000 et seq., and the Clean Water Act, 33 U.S.C. § 1251 et seq., and each of their state and local counterparts presently in effect or amended or promulgated in the future. "Existing Lender" shall have the meaning set forth in Section 2.1(c) of this Lease. "Force Majeure" means events beyond the reasonable control of the affected Party, and which could not reasonably be prevented or avoided by the affected Party, which prevent or delay the effected Party from performing its obligations under or related to this Lease, including, without limitation, acts of God, fire, floods, storms, earthquake, unusually severe weather, wars, riots, sabotage, civil disturbance, acts of civil or military authorities, terrorist acts affecting the Property, labor disputes, or the act or inaction by any governmental authority which delays, prevents or prohibits the effected Party from carrying out its respective obligations under this Lease; provided that the definition of Force Majeure shall in no event include the inability of a Party to meet its financial obligations under this Lease. Any force majeure delay shall automatically extend the date for performance under this Lease by one (1) day for every one (1) day of delay. "Future Lender" shall have the meaning set forth in Section 3.10.3 of this Lease. "Hazardous Materials" means (a) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws (hereafter defined) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “extremely hazardous waste”, “acutely hazardous waste”, “radioactive waste”, “infectious waste”, “bio hazardous waste”, “toxic substance”, “pollutant”, “toxic pollutant”,

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“contaminant” as well as any formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, “EP toxicity”, or “TCLP toxicity”; (b) “hazardous substance” as defined in any Environmental Law; (c) “waste” as defined in any Environmental Law; (d) asbestos in any form: (e) urea formaldehyde foam insulation; (f) polychlorinated biphenyls (PCBs); (g) radon; and h) any other chemical, material, or substance exposure to which is limited or regulated by any Governmental Agency (hereafter defined) because of its quantity, concentration, or physical or chemical characteristics, or which poses a significant present or potential hazard to human health or safety or to the environment ifreleased into the workplace or the environment.and includes any substance, material, waste, pollutant, or contaminant listed or defined as hazardous or toxic under any Environmental Requirements, asbestos and petroleum, including crude oil or any fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas). "Lessee" shall have the meaning set forth in the preamble to this Lease. "Lessee Event of Default" shall have the meaning set forth in Section 3.14.1 of this Lease. "Lessor" shall have the meaning set forth in the preamble to this Lease. "Lessor Event of Default" shall have the meaning set forth in Section 3.14.2 of this Lease. "Legal Requirements" All laws, statutes, orders, judgments, ordinances, regulations, codes or directives of any governmental authorities now or hereafter applicable to the Property and this Lease.
"Notices" shall have the meaning set forth in Section 5.10 of this Lease. "Permits" means any and all approvals, permits, permissions, licenses, authorizations, consents, certifications, orders, waivers, exemptions, variances, franchises, filings, declarations, rulings and registrations from or issued by a government authority required under applicable Legal Requirements for Lessee to install, operate and maintain the permitted use. "Permitted Use" means the use of the Property as a gym. "Person" means any corporation, limited liability company, any form of partnership, any joint venture, trust, estate, governmental authority or other legal or commercial entity or any natural person.
"Property" shall have the meaning set forth in the recitals to this Lease. "Renewal Term" or “Renewal Terms” means any extension of the Term pursuant to Section 3.2.2.
"Rent" means an annual amount as outlined in lease paid by Lessee to Lessor. "Term" means a term beginning on the Effective Date and ending on the last day of the calendar month of the thirty (30) year anniversary of this Lease, subject to any Renewal Terms, if

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applicable. The Term may be extended in accordance with the terms and conditions set forth in this Lease.
"Transaction" shall have the meaning set forth in the recitals to this Lease.

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EXHIBIT C
Insurance Coverage

1. Lessee Insurance Requirements.

1.1 Lessee Required Coverages. Lessee shall carry and maintain with carriers or self insurance, as a minimum, the following insurance coverages:
(a) Workers Compensation Insurance and Employers Liability. In accordance with the laws of the state of where work may be done with limits for employers liability in the minimum amount of $1,000,000 for each occurrence and $1,000,000 for each occurrence of disease on a per employee basis;
(b) Commercial General Liability. One million dollars ($1,000,000) per occurrence/two million ($2,000,000) in the aggregate for bodily injury, personal injury and property damage, products and completed operations:
(i) $300,000 for damage to rented Property, per occurrence; (ii) $10,000 for medical expenses, per person;
(iii) $1,000,000 for personal and advertising injury; and (iv) $2,000,000 for product and completion aggregate
(c) Commercial Automobile Liability, Any Auto. One million dollars ($1,000,000_ per accident/two million dollars ($2,000,000) aggregate for bodily injury and property damage. scheduled, non-owned and hired automobiles. (d) Professional Liability Insurance. The insurance shall cover Lessee and its design consultant(s) for one million dollars ($1,000,000) per claim and $2,000,000 in the aggregate; and

1.2 Policy Endorsements. Insurance coverages required to be maintained by Lessee under this Lease shall:
(a) provide a severability of interests or cross liability clause for Commercial General Liability Insurance;
(b) except in the case of worker’s compensation insurance and other statutory insurances where it would be inappropriate, name Lessor and, as additional insured’s.

2. Lessor Insurance Coverage.

2.1 Lessor Required Coverages. Lessor shall carry and maintain with carriers or self insurance, as a minimum, the following insurance coverages:

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(a) Lessor shall, at Lessor’s sole cost and expense, maintain during the Term and beginning with any Commencement of Construction, a minimum level of commercial general liability insurance of one million dollars($1,000,000) per occurrence and two million dollars ($2,000,000) in the aggregate for property damage, personal injury or deaths of persons occurring in or about the Property during the Term (including loss of use thereof arising out of Lessor’s operations and contractual liabilities), and Lessor shall carry property insurance written on an “all risks” basis covering the Property. Such coverage shall from such companies and on such other terms and conditions as Lessor may from time to time reasonably determine.

1 OPTION AGREEMENT
This Option Agreement is made between the CITY OF MCFARLAND, a California Municipal corporation (“Optionor”) and NORMAN YOUSIF (“Optionee”), and pertains to the real property and building commonly known as Parcel 4 and Parcel 3 of Westing Tentative Parcel Map 12463, being a portion of APN 201-031-04, McFarland, CA 93250, and more particularly shown on Exhibit A attached hereto (the “Property”). This Option Agreement is dated ___________, 2025 for reference purposes only.

1. Optionor grants to Optionee the option to purchase the real property commonly known as Parcel 4 and Parcel 3 of Westing Tentative Parcel Map 12463, being a portion of APN 201-031-04, McFarland, CA 93250 (the “Property”). This option is on the terms and conditions set forth in this Option Agreement. The purchase and sale of the Property on exercise of this option shall be on the terms and conditions set forth in this Option Agreement.

2. The initial term of the option shall begin six (6) months after the City has approved the development of the Property in writing, and shall terminate four (4) years after such approval has been provided, or upon the termination of the Lease Agreement by and between the Parties made and entered into on ______________, 2025 (“Lease Agreement”).

3. The purchase price to be paid by Optionee in the event Optionee elects to exercise the option to purchase, is Four Hundred Thirty One Thousand Twenty Four Dollars ($431,034) (the “Purchase Price”). The Purchase Price shall be increased 3% each year, upon the yearly anniversary of completion of the development, which as stated above, shall be evidenced in writing.

4. The consideration given for this option by Optionee is Optionee’s agreement to enter into concurrently that certain Lease Agreement for the Property and the sum of One Thousand Five Hundred Dollars ($1,500.00). The option consideration set forth in this section, as well as any other consideration deemed to have been received by Optionor under this Option Agreement, is and shall be deemed consideration solely for the granting of the option by Optionor. On expiration of the option term, Optionor shall retain all option consideration. If the option is exercised, the consideration referenced above shall not be credited against the purchase price of the Property, if closing occurs.

5. If Optionee is not in default under this Option Agreement and that all conditions to the exercise of the option are satisfied or are waived in writing by Optionor, Optionee may exercise the option in accordance with this section and in no other manner. The option shall be exercised by delivering written notice from Optionee to Optionor before the expiration of the term of this option and in accordance with the notice provisions hereof (“Exercise Notice”). The Exercise Notice shall affirmatively state that the Optionee either (1) exercises the option with condition that Optionee obtains financing for the purchase, or (2) exercises the option without condition that Optionee obtains financing for the purchase. Within ten (10) business days after exercise of the option, the parties shall execute and deliver the standard escrow instructions used by First American Title Company (Nancy Smith or whomever she may assign as Escrow Officer) for transactions of this type (a typical purchase and sale of a commercial property in Kern County, California), which escrow instructions shall serve as the purchase and sale agreement of the parties. Moreover, the parties agree that any and all required disclosures on the

2 part of the Optionor (as seller of a commercial property) such as, e.g., a Real Estate Transfer Disclosure Statement, will be obtained and provided in the course of the escrow. Parties shall bear the costs of escrow equally.

6. The closing of escrow shall occur no later than thirty-five (35) calendar days after the parties have signed the escrow instructions (“Closing Date”).

7. After execution of the escrow instructions by the parties, Optionor shall promptly order and deliver to Optionee a current preliminary title report on the Property prepared by First American Title Company, together with copies of all documents identified as exceptions in the report (“Preliminary Title Report”). Optionee shall have seven (7) business days after receipt of the Preliminary Title Report in which to approve or disapprove any or all the exceptions shown in the Preliminary Title Report.

8. Optionee shall disapprove exceptions shown in the Preliminary Title Report only by delivering written notice to Optionor and the escrow holder within the seven (7) business days. If Optionee does not give written notice of disapproval within that time, Optionee shall be deemed to have approved all the exceptions shown in the Preliminary Title Report.

9. If Optionee disapproves any exception to title, as provided above, Optionor shall notify Optionee within five (5) business days after receipt of such notice of disapproval if Optionor is unwilling to clear the disapproved exceptions. Optionor covenants that, if the option is exercised, Optionor shall, on or before Closing Date, cause all disapproved exceptions to be removed as encumbrances against title to the Property except any exceptions as to which Optionor has notified Optionee that Optionor will not remove, in accordance with the notice provisions of this section.

10. If Optionor notifies Optionee that Optionor will not remove one or more disapproved exceptions, Optionee may elect by delivering written notice to Optionor, within three (3) business days after receipt of Optionor’s notice, i) to terminate this option or ii) to waive this condition, and this option shall then remain in full force and effect. Optionee’s failure to give notice shall waive this condition.

11. Optionee shall comply with all applicable governmental laws, ordinances, and regulations in relation to the Property.

12. This option is personal to Optionee. Optionee may not assign this option or any right under it. If any assignment is attempted, Optionee’s rights under this option shall automatically terminate, without notice.

13. On execution of this Option Agreement, Optionor and Optionee shall execute and record in the official records of the county in which the Property is located a memorandum of option. Optionee shall pay the recording cost. Optionee covenants to execute and deliver to Optionor immediately on the expiration or earlier termination of the term of this Option Agreement a quitclaim deed in recordable form releasing and reconveying to Optionor all right, title, and interest of Optionee in the Property.

14. Time is of the essence of this Option Agreement and is a material term of this

3 Option Agreement. If the option is not exercised as required by this Option Agreement before expiration of the term of the option that is set forth here, the option and all rights of Optionee shall automatically and immediately terminate without notice, and Optionee shall have no interest whatever in the Property. Once it has terminated, the option may not be revived by any subsequent payment or further action by Optionee.

15. In the event of any action at law or in equity between the parties arising from or in connection with this Option Agreement, the prevailing party shall recover attorney fees and other costs incurred in that action in addition to any other relief, and such attorney fees and costs shall be included in and as a part of any judgment in such action.

16. All notices and other communications authorized or required under this Option Agreement shall be in writing and shall be given by (a) personal delivery, (b) mailing by certified mail or registered mail, return receipt requested, postage prepaid, or United States express mail, or (c) delivery by commercially recognized courier service. Any such notice or other communication shall be deemed to have been given on the date of delivery or refusal to accept delivery if addressed as follows:

To Optionee: Norman Yousif
With a Copy to: Sean Maddocks
Green Consulting Partners
23 Corporate Plaza Drive, #150
Newport Beach, CA 92660
To Optionor: City of McFarland
401 W Kern Avenue
McFarland, CA 93250
Attention: City Manager
Telephone: 661-792-3091
Email:

With a copy to: Hodges Law Group
Attn: Nathan M. Hodges
1925 G Street
Bakersfield, CA 93301

17. This Option Agreement contains the entire agreement between the parties pertaining to the subject matter in it and supersedes all prior and contemporaneous agreements, representations, and understandings of the parties. No supplement, modification, or amendment of this Option Agreement shall be binding unless executed in writing by all parties.

18. No waiver of any provision of this Option Agreement shall constitute or be deemed a waiver of any other provision, whether or not similar, nor shall any waiver constitute a

4 continuing waiver. No waiver shall be binding unless it is executed in writing by the party making the waiver.

19. The captions to the paragraphs of this Option Agreement are inserted for convenience only and shall not affect the intent of this Option Agreement.

20. All provisions of this Option Agreement, and all the parties’ rights and obligations, shall extend to and bind, or inure to the benefit not only of the parties hereto but to each and every one of the heirs, executors, representatives, successors, and assigns of the parties.

IN WITNESS WHEREOF, the parties have executed this Option Agreement on the date set forth beside the signature of each.

OPTIONEE: OPTIONOR:

NORMAN YOUSIF THE CITY OF MCFARLAND
By: By:

Title: Title:

Date: Date:

5 EXHIBIT “A”
A portion of APN 201-031-04 shown on Vesting Tentative Parcel Map No 12463 as parcel 4, with exception of existing building and pad as shown, and parcel 3

City of McFarland
City Council Meeting

STAFF REPORT
Agenda Item No. 2.

Section: ADMINISTRATIVE
AGENDA
Meeting Date: December 15,
2025
TO: Honorable Mayor and Council Members
FROM: Diego Viramontes, City Manager
Megan Snyder, Community Development Director
SUBJECT: Approval of Resolution No. 2025-164 A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF MCFARLAND APPROVING A LAND LEASE

AGREEMENT WITH THE MCFARLAND RECREATION & PARK DISTRICT

FOR THE PUBLIC SWIMMING POOL FACILITIES
SUMMARY:

In November 2025, McFarland voters approved Measure C, establishing a 1 percent Transactions and Use Tax (TUT) to help stabilize City finances, strengthen public safety, invest in critical infrastructure, and restore recreational amenities for families and youth.

Among the community’s priority requests was reopening the public swimming pool, which has been closed for several years due to deterioration of major mechanical systems, structural deficiencies, and lack of operational funding.

The McFarland Recreation & Park District, owner of the pool property located at APN 201-070- 44, has agreed in concept to lease the City the portion of the property that includes the public swimming pool and all associated facilities necessary for operation. The proposed Land Lease Agreement grants the City long-term site control, enabling the City to assess capital rehabilitation needs, pursue funding, and begin the process of restoring the pool for community use.

Under the lease, the City receives exclusive rights to access, repair, improve, and operate the pool facilities, as depicted in Exhibit D and legally described in Exhibit A of the lease. The agreement includes a 30-year initial term with two optional 40-year extensions, allowing sufficient time to finance upgrades and operate the pool for future generations.

Approval of this lease is the first essential step in evaluating the condition of the pool, determining required capital improvements, and developing a sustainable funding plan for operations and maintenance. Once operational, preliminary estimates based on similarly sized public swimming pools indicate annual operating costs ranging from $400,000 to $500,000.

These costs will be incorporated into the City’s long-term budgeting strategy and supported in part by Measure C revenues.

FINANCIAL IMPACT:

Approval of the lease does not commit the City to immediate capital expenditures. The lease establishes site control so the City can conduct full due-diligence on the pool’s structural, mechanical, safety, and accessibility needs.

Known impacts include:

1. Annual Lease Cost: The lease requires an annual payment of $1.00 to the McFarland Recreation & Park District.

2. Capital Improvements: The City has not yet completed a full assessment. Costs may include rehabilitation of the pool basin, mechanical and pump systems, restrooms, deck surfaces, lighting, ADA upgrades, and other infrastructure. Staff will return to Council with a detailed capital improvement plan and financing options once evaluations are complete.

3. Annual Operations: Based on comparable municipal pools, anticipated annual operating costs range from $400,000 to $500,000, including staffing, chemicals, utilities, maintenance, insurance, and programs. Staff will present operational models, costrecovery strategies, and revenue options during future phases of the project.

4. Funding Strategy: Measure C revenues will support the initial due-diligence, capital planning, and long-term operational sustainability. Staff will also pursue grants, partnerships, and state/federal recreation funding programs.

There is no immediate negative financial impact from approving the lease itself. Costs associated with future phases will be brought to Council for review and approval before any commitments are made.

RECOMMENDATION:

Staff recommends that the City Council:

1. Approve the Land Lease Agreement between the City of McFarland and the McFarland Recreation & Park District for the public swimming pool facilities located within APN 201-070-44.

2. Authorize the City Manager to execute the agreement and any related documents necessary to initiate site evaluations and begin planning for rehabilitation and reopening of the community pool.

ATTACHMENTS:

1. POOL LAND LEASE AGREEMENT

RESOLUTION NO. 2025-164

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MCFARLAND APPROVING A

LAND LEASE AGREEMENT WITH THE MCFARLAND RECREATION & PARK DISTRICT

FOR THE PUBLIC SWIMMING POOL FACILITIES
WHEREAS, the public swimming pool in McFarland has been closed for several years due to significant maintenance and safety deficiencies; and
WHEREAS, the voters of McFarland approved Measure C in November 2025, establishing a 1 percent Transactions and Use Tax to support public safety, critical infrastructure, and restoration of essential community amenities, including the reopening of the community pool; and WHEREAS, the McFarland Recreation & Park District owns the property containing the public swimming pool and associated facilities located within APN 201-070-44; and WHEREAS, the District has agreed to lease to the City the portion of the property described in Exhibit A of the Land Lease Agreement to enable the City to rehabilitate, operate, and maintain the pool facilities for the benefit of the community; and
WHEREAS, the lease provides the City long-term site control, including the exclusive right to access, repair, improve, and operate the public swimming pool and associated improvements; and WHEREAS, approval of the lease is a necessary first step toward conducting thorough evaluations of capital needs and developing a plan to restore the pool to operational condition for the community;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of McFarland that it hereby finds and determines as follows:

1. The City Council hereby approves the Land Lease Agreement between the City of McFarland and the McFarland Recreation & Park District for the public swimming pool facilities located within APN 201-070-44.

2. The City Council authorizes the City Manager to execute the agreement and any ancillary documents required to implement the lease.

3. Staff is directed to commence evaluation of the pool’s structural, mechanical, and operational needs and return to the City Council with a comprehensive capital improvement plan and

funding strategy.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of McFarland on December 15, 2025 by the following vote:

Aye Nae Abstain Absent
Saul Ayon
Ricardo Cano
Anita Gonzalez
María T. Pérez
Martin Gutierrez

CITY OF MCFARLAND
____________________________
Saul Ayon, Mayor
ATTEST:
_____________________________
Erika De La Cruz, City Clerk
I, _________________________, City Clerk of the City of McFarland, California, DO HEREBY CERTIFY that the foregoing resolution is a true and accurate copy of the Resolution passed and adopted by the City Council of the City of McFarland on the date and by the vote indicated herein.

APPROVED AS TO FORM:
_____________________________
Nathan Hodges, City Attorney

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LAND LEASE
by and between
McFarland Recreation and Park District
as Lessor
and
City of McFarland
as Lessee

TABLE OF CONTENTS
Page
-i1. Definitions ..........................................................................................................................1

2. Lease of Property................................................................................................................1

2.1 Property; Title.........................................................................................................1

3. Lease Provisions.................................................................................................................2

3.1 Permitted Use; Compliance with Legal Requirements...........................................2

3.2 Term........................................................................................................................3

3.2.1 Initial Term.................................................................................................3

3.2.2 Option to Extend.........................................................................................3

3.2.3 Expiration; No Holdover ............................................................................3

3.2.4 Early Termination.......................................................................................3

3.3 Permits....................................................................................................................3

3.4 Rent.........................................................................................................................4

3.4.1 Late Payment ..............................................................................................4

3.5 Lessee Insurance.....................................................................................................4

3.6 Lessor Insurance .....................................................................................................4

3.7 Indemnification.......................................................................................................4

3.8 Limit of Liability ....................................................................................................4

3.9 Consequential Damages..........................................................................................4

3.10 Assignment and Sublease; Non-Disturbance..........................................................5

3.10.1 Assignment and Subleases by Lessee.........................................................5

3.10.2 Assignments by Lessor...............................................................................5

3.10.3 Non-Disturbance Lease-Future Lenders.....................................................5

3.11 Inspection and Access.............................................................................................6

3.12 Surrender of Property .............................................................................................6

3.13 Hazardous Materials...............................................................................................6

3.14 Events of Default ....................................................................................................8

3.14.1 Lessee Event of Default..............................................................................8

3.14.2 Lessor Event of Default..............................................................................8

3.15 Actions in Case of Default......................................................................................9

3.15.1 For Lessor...................................................................................................9

TABLE OF CONTENTS
(continued)
Page
-ii3.15.2 For Lessee...................................................................................................9

4. Installation of __________ Facilities and Equipment........................................................9

4.1 Installation ..............................................................................................................9

4.2 No Lessor Liability.................................................................................................9

4.3 Ownership of Solar Facilities and Ancillary Equipment........................................9

5. Miscellaneous...................................................................................................................10

5.1 Construction of Certain Terms and Phrases .........................................................10

5.2 Amendments.........................................................................................................11

5.3 Taxes.....................................................................................................................11

5.4 Headings...............................................................................................................11

5.5 Binding Effect.......................................................................................................12

5.6 Memorandum of Lease; Fixture Filing.................................................................11

5.7 No Brokers............................................................................................................12

5.8 Waiver...................................................................................................................12

5.9 Remedies Cumulative...........................................................................................12

5.10 Notices..................................................................................................................12

5.11 Severability...........................................................................................................13

5.12 No Third-Party Beneficiary ..................................................................................13

5.13 Quiet Enjoyment...................................................................................................13

5.14 Choice of Law.......................................................................................................13

5.15 Dispute Resolution................................................................................................14

5.16 Further Assurance.................................................................................................14

5.17 Counterparts..........................................................................................................14

5.18 Entire Lease ..........................................................................................................14

5.19 No Merger.............................................................................................................14

5.20 Time......................................................................................................................14

5.21 Business Day ........................................................................................................15

5.22 Accord & Satisfaction...........................................................................................15

5.23 No Partnership ......................................................................................................15

5.24 Survival.................................................................................................................15

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LAND LEASE
This LAND LEASE (the "Lease") is made and entered into as of ________, 2025 (the "Effective Date"), organized and existing under the laws of the State of California by and between the City of McFarland (“Lessee”) a municipal corporation, and the McFarland Recreation and Park District, a California Special District (“Lessor”). Lessee, and Lessor are sometimes hereinafter individually referred to as a “Party” and collectively as the “Parties.” The lease transaction contemplated by this Lease is hereinafter referred to as the “Transaction.”

RECITALS
A. Lessor is the owner of that certain real property commonly known as APN # 201- 070-44, and more particularly described on Exhibit A attached hereto (the “Property”).

B. Lessor’s intent is to provide the City of McFarland with access to, and use of the portion of the Property as designated on Exhibit A.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and Leases herein contained, the Parties hereto agree upon the following terms and conditions.

LEASE

1. Definitions. Unless otherwise required by the context in which any term appears, capitalized terms used in this Lease shall have the respective meanings set forth in Exhibit B – GLOSSARY OF TERMS, attached hereto.

2. Lease of Property.

2.1 Property; Title.
(a) The lease of the Property to Lessee for the Permitted Use shall commence in accordance with the Rent requirements set forth in Section 4.4 and Section 5.2. Lessor further grants to Lessee, during the period commencing on the Effective Date of this Lease and ending upon the expiration or earlier termination of the Term of the leasing contemplated hereby:
(i) a non-exclusive easement for access to the Property across or through the external portion of the Property and any surrounding or adjacent area owned or leased by Lessor which is necessary or convenient to gain access to the Property; and (ii) the exclusive use of, and right to install and operate, the Public Pool Facilities and Equipment on the Property depicted on Exhibit A, attached hereto, and the exclusive right to maintain, repair and replace such Public Pool Facilities and Equipment throughout the Term of this Lease (and, in connection with the foregoing, Lessor confirms that it

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has the ability to allow Lessee to install and operate the Public Pool Facilities and Equipment in such manner and locations).
(b) So long as Lessee is not in default of its obligations hereunder, beyond the expiration of any applicable notice and cure period, Lessee shall have quiet and peaceful possession of the Property and easements described in Section 2.1(a), the exclusive right of occupancy of the Property and the right to use the easements described in Section 2.1(a)(i) in common with Lessor, except as otherwise provided in this Lease; and Lessee shall be permitted to access the Property twenty-four (24) hours a day, seven (7) days a week throughout the Term of this Lease.
(c) Lessor represents that as of the date hereof:
(i) Lessor has lawful title to the Property and full right to enter into this Lease;
(ii) Lessor is an organized and existing under the laws of the State of California and has all requisite powers and all authorizations required to own and operate the Property;
(iii) Lessor has obtained all third-party approvals and consents (if any) required to enter into this Lease and perform its obligations hereunder; (iv) Property is free from any mortgages, liens and encumbrances and rights of third parties that could materially and adversely affect Lessee's right to use and occupy the Property, other than (1) no other Lessees have any right to enter, occupy or use the Property without Lessor's prior approval (which approval shall be exercised in a manner consistent with the rights of Lessee under this Lease so as to avoid any interference with or disturbance of Lessee’s operation of the Public Pool Facilities and Equipment), and (2) the rights of site control of the pool and associated equipment and facilities located on APN # 201-070-44 (the "Existing Lender") which rights are subject to the provisions of this Lease; and (v) Lessor is not a party to, or bound as a successor-in-interest to, or assignee of, a party to, any covenants, conditions, encumbrances, leases, Leases, or use restrictions that prevent or materially restrict the construction, installation or operation of the Public Pool Facilities and Equipment on the Property; and Lessor warrants there are no existing covenants, conditions, encumbrances, leases, or use restrictions to which it is not a party or bound by that will prevent or materially restrict Lessees use of the Property during the term of the Lease.

2.2 Public Pool Facilities and Equipment; Other Rights. Lessor grants Lessee the exclusive use and right to install and operate during the Term of this Lease the Public Pool Facilities and Equipment in the locations depicted on Exhibit A attached hereto.

3. Lease Provisions.

3.1 Permitted Use; Compliance with Legal Requirements.

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(a) Lessee shall use the Property solely for the Permitted Use and shall not use or permit the Property to be used for any other use or purpose whatsoever without Lessor’s prior written (which approval shall not be unreasonably withheld, delayed or conditioned). (b) Lessee shall procure, at its sole cost and expense, any and all permits required for Lessee’s use and occupancy of the Property.

3.2 Term.

3.2.1 Initial Term. The initial Term of this Lease shall begin upon the Effective Date of this Agreement and shall expire on the last day of the month in which the Thirty (30) year anniversary shall occur.

3.2.2 Option to Extend. Lessor hereby grants to Lessee the right, exercisable at Lessee’s option, to renew the Term of this Lease for up to two (2) successive terms of forty (40) years each (each, a "Renewal Term" and, collectively, the "Renewal Terms"). Lessee may exercise its options to extend the Term of this Lease for one or more Renewal Terms at any one time. If Lessee elects to extend this Lease for one or more such Renewal Terms, Lessee shall provide Lessor with written notice of its election no later than the 180th day immediately preceding the expiration of the initial Term of this Lease (with respect to Lessee's exercise of the first such Renewal Term(s)) and no later than the 180th day immediately preceding the expiration of thencurrent Renewal Term (with respect to Lessee's exercise of any subsequent Renewal Term(s)).

If Lessee elects to extend this Lease for one or more such Renewal Terms, the first renewal of the Lease Term (the "First Renewal Term") shall commence immediately following the end of the initial Term provided in Section 3.2.1 of this Lease. Each successive Renewal Term shall commence immediately following the end of the immediately previous Renewal Term. All terms and conditions of this Lease, including without limitation, all provisions governing the payment of Rent, shall remain in full force and effect during the Renewal Terms.

3.2.3 Expiration; No Holdover. Upon the expiration of the initial Term and all applicable Renewal Terms, this Lease shall automatically expire and Lessee shall vacate the Property.

3.2.4 Early Termination. Lessee, at its sole and absolute discretion, shall have the right to terminate this Lease at any time and for any reason during the Term, effective upon six (6) months’ prior written notice to Lessor. Upon such termination, except for rights and obligations that expressly survive termination as set forth herein, neither party shall have any further liability under this Lease.

3.3 Permits. Lessee hereby agrees to obtain and keep in full force and effect for the duration of this Lease all Permits necessary for the installation, operation and maintenance of the Public Pool Facilities and Equipment at its own cost and expense. Lessor hereby consents to any action taken by Lessee in applying for any and all such Permits, and to the extent necessary or convenient, agrees to join or otherwise acknowledge any application or filing for the same.

3.4 Rent. Commencing on the Effective Date, Lessee agrees to pay Rent to Lessor, in advance, on the first day of the Calendar Year during the Term in the amount of $1.00 per year.

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3.4.1 Late Payment. If Lessee is delinquent by ten (10) or more calendar days after the date such payment of Rent or any other amount was due and payable under this Lease, Lessee shall pay to Lessor on demand a late payment charge equal to two (2%) of such delinquent sum.

3.5 Lessee Insurance. Lessee shall, at Lessee’s sole cost and expense, maintain during the Term, beginning with the Commencement of Construction, the insurance coverage described on Exhibit C attached hereto.

3.6 Lessor Insurance. Lessor shall, at Lessor’s sole cost and expense, maintain during the Term and beginning with any Commencement of Construction, the insurance coverage described on Exhibit C attached hereto.

3.7 Indemnification. Lessor and Lessee hereto agree to indemnify, defend, and hold the other harmless from and against any and all liability, loss, expense, attorneys’ fees, or claims for injury and/or damages arising from or in any way connected to the performance of this Lease but only in proportion and to the extent such liability, loss, expenses, attorneys’ fees, or claims for injury or damages caused by or result from the negligent or intentional acts or omissions of the indemnifying Party, its officers, agents or employees in or about the Property. The duties described in this Section 3.7 apply as of the Effective Date of this Lease and survive the termination thereof.

This indemnity does not cover claims arising from the presence or release of Hazardous Materials subject to Section 3.13 of this Lease.

3.8 Limit of Liability. To the maximum extent permitted by law, Lessor agrees to limit the Lessee’s liability for any and all claims, losses, costs, damages of any nature whatsoever or claims expenses from any cause or causes, including attorneys’ fees and costs and expert-witness fees and costs, so the total aggregate liability of the Lessee to the Lessor shall not exceed the outstanding amounts of the Rent due under the Term of the Lease. This limitation shall apply regardless of the cause of action or legal theory pled or asserted. The duties described in this Section 3.8 apply as of the Effective Date of this Lease and survive the termination thereof.

3.9 Consequential Damages. Notwithstanding any other provision of this Lease, and to the fullest extent permitted by law, neither the Lessor nor the Lessee, their respective officers, directors, partners, employees, contractors or subcontractors shall be liable to the other or shall make any claim for any incidental, indirect or consequential damage arising out of or connected in any way to this Lease. This mutual waiver of consequential damages shall include, but is not limited to, loss of use, loss of profit, loss of business, loss of income, loss of reputation or any other consequential damages that either Party may have incurred from any cause of action including negligence, strict liability, breach of contract and breach of strict or implied warrantee.

The duties described in this Section 3.9 apply as of the Effective Date of this Lease and survive the termination thereof.

3.10 Assignment and Sublease; Non-Disturbance.

3.10.1 Assignment and Subleases by Lessee. Lessee shall sublease this Lease to the City of McFarland pursuant to the terms and conditions of the Lease. City will accept all rights and obligations pursuant to this Lease. However, Lessee will continue to act as the intermediary

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between Lessor and the City, such that all communication between Lessor and the City will go through Lessee.

3.10.2 Assignments by Lessor. All obligations of Lessor under this Lease will be binding upon Lessor only during the period of its ownership of the Property and not thereafter.

The term “Lessor” in this Lease shall mean only the current owner of the Property. In the event of a transfer by such owner of its interest in the Property and the assumption of this Lease by a subsequent owner of the Property, such transferring owner shall thereupon be released and discharged from all obligations of Lessor hereunder thereafter accruing, but such obligations shall be binding during the Term upon each new owner for the duration of such owner’s ownership of the Property. Lessor shall not assign its interest under this Lease separately from its ownership of the Property. Any purchaser or other transferee of Lessor’s interest in the Property shall acquire such interest and by acquiring Lessor’s interest in the Property, shall be deemed to have accepted and assumed all the rights and obligations of Lessor under this Lease.

3.10.3 Non-Disturbance Lease-Future Lenders. The Parties intend that this Lease, and the rights of Lessee hereunder (including, without limitation, Lessee's rights under this Lease, and all rights of Lessee with respect to the Security) shall be superior, and not subject or subordinate, to any future lien, charge, mortgage or security interest in or on the Property.

Notwithstanding the foregoing, if this Lease and the rights of Lessee hereunder shall be subject and subordinate to any such future lien, charge, mortgage or security interest in or on the Property by operation of law, or if the holder of any such future lien, charge, mortgage or security interest in or on the Property (each a "Future Lender") shall require the subordination of this Lease to the lien of such future lien, charge, mortgage or security interest in or on the Property, Lessee shall not be obligated to subordinate its rights and interests hereunder unless such Future Lender enters into a non-disturbance Lease with Lessee. Lessee agrees to use good faith efforts to agree upon a non-disturbance Lease with any such Future Lender.

3.11 Inspection and Access.
(a) In the event of an emergency, Lessor and its agents, representatives, contractor or designees, shall be allowed full and immediate access to the Property without being subject to the notification and other limitations referenced in Section 3.11(b) below. (b) Lessor and its agents, representatives, contractors or designees, shall, upon at least twenty-four (24) hours prior written notice to the Lessee (which written notice may be made by email to Lessee), be permitted to access the Property at any time to inspect and maintain the Property for any business purpose (including, but not limited to, security); provided that Lessor be accompanied by a Lessee Representative at all times; and, will avoid interference with Lessee’s operation of the Public Pool Facilities and Equipment (except to an immaterial degree, and then only to the minimum extent necessary), and agrees to cooperate with and assist Lessee in preventing such interference by such other Persons. Lessor and such other Persons shall use all reasonable efforts to not disturb Lessee’s operation of the Public Pool Facilities and Equipment during such access.

3.12 Surrender of Property. Upon the expiration or termination of this Lease pursuant to the provisions hereof, Lessee shall quit and surrender the Property to Lessor in good order,

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condition and repair in accordance with the provisions of this Section 3.12. Provided Lessor is not in default under this Lease beyond any applicable cure, such surrender of the Property and removal of the Public Pool Facilities and Equipment shall be accomplished at Lessee’s sole cost and expense. If Lessor is in default under this Lease beyond any applicable cure period, the Lessee’s expenses incurred in the surrender of the Property including damages and removal of the Public Pool Facilities and Equipment shall be a recoverable expense. On a mutually convenient date, but in no case later than one hundred and eight (180) days after the termination or expiration of this Lease, Lessee shall remove from the Property the Public Pool Facilities and Equipment (including all additions, alterations, and improvement thereto or replacements thereof and all appurtenance fixtures, machinery and equipment installed therein, and shall make commercially reasonable efforts to restore the Property to substantially the condition in which it existed upon start of construction, reasonable wear and tear and loss by casualty or other causes beyond Lessee’s reasonable control excepted.

3.13 Hazardous Materials. Except for Hazardous Materials contained in products used by Lessee in de minimis quantities for ordinary cleaning purposes, and those contained in the make-up of the Public Pool Facilities and Equipment (all of which shall be used, stored and disposed of in compliance with applicable Legal Requirements), Lessee agrees not to cause or permit any Hazardous Materials to be brought upon, stored, used, handled, generated, released or disposed of on, in, under or about the Property, or any other portion of the Property by Lessee, its agents, officers, directors, shareholders, members, managers, partners, employees, subleases, assignees, licensees, contractors or invitees (collectively, "Lessee’s Parties"), without the prior written consent of Lessor, which consent Lessor may withhold in its sole and absolute discretion.

Upon the expiration or earlier termination of this Lease, Lessee agrees to promptly remove from the Property, and the Property, at its sole cost and expense, any and all Hazardous Materials, including any equipment or systems containing Hazardous Materials which are installed, brought upon, stored, used, generated or released upon, in, under or about the Property, and/or the Property or any portion thereof by Lessee or any of Lessee's Parties. To the fullest extent permitted by law, Lessee agrees to promptly indemnify, protect, defend and hold harmless Lessor and Lessor's members, shareholders, partners, officers, directors, managers, employees, agents, contractors, successors and assigns (collectively, "Lessor Parties") from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including, without limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees and court costs) which arise or result from the presence of Hazardous Materials on, in, under or about the Property, or any other portion of the Property and which are caused or permitted by Lessee or any of Lessee's Parties.

The provisions of this Section 3.13 will survive the expiration or earlier termination of this Lease.

Lessor shall indemnify, defend, and hold Lessee harmless from and against any and all losses, claims, demands, actions, suits, damages, expenses (including, without limitation, remediation, removal, repair, corrective action, or cleanup expenses), and costs (including, without limitation, actual attorneys' fees and consultant fees) which are brought or recoverable against, or suffered or incurred by Lessee as a result of the presence of Hazardous Materials on, in, under or about the Property, or any other portion of the Property and which are caused or permitted by Lessor or any Lessor Parties. The obligations of Lessor under this Section 3.13 shall survive any termination of this Lease.

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Notwithstanding anything to the contrary in this Section 3.13, Lessee shall have no liability of any kind to Lessor as to Hazardous Materials on, under or about the Property caused, released or permitted by:
(a) Lessor, its agents, employees, contractors or invitees; (b) Any other Person or entity located outside of the Property; or (c) In existence as of the Effective Date whether or not caused by Lessor, its agents, employees, contractors or invitees.

Lessor represents that, to its knowledge, as of the date hereof there are no Hazardous Materials that are in violation of Environmental Requirements on the Property. If Hazardous Materials are hereafter discovered on the Property, and the presence of such Hazardous Materials is not created by Lessee, its agents, employees, contractors, subleases or invitees, and the presence of such Hazardous Materials results in any contamination, damages, or injury to the Property or otherwise adversely affects Lessee's occupancy or use of the Property or human health, Lessor shall promptly take all actions at its sole expense as are necessary to remediate such Hazardous Materials and as may be required by Environmental Requirements. Actual or threatened action or litigation by any governmental authority is not a condition prerequisite to Lessor's obligations under this paragraph. As soon as reasonably possible, and in all events no later than thirty (30) days following Lessor’s receipt of notification from Lessee supported by reasonable documentation setting forth such presence or release of Hazardous Materials, Lessor shall commence and, within a reasonable period of time, complete its own investigation to confirm such presence or release of Hazardous Materials. Lessor shall commence to remediate such Hazardous Materials as soon as reasonably possible, and in all events within thirty (30) days after the completion of Lessor's investigation and thereafter diligently prosecute such remediation to completion. If Lessor commences remediation pursuant to this paragraph, the Rent shall be equitably adjusted if and to the extent and during the period the Property are unsuitable for Lessee's business. However, if the time involved or delays in Lessor’s investigation or remediation of the presence or release of Hazardous Materials or the nature of such investigation or remediation could reasonably be expected to cause Lessee to be unable to utilize the Property to operate Public Pool Facilities and Equipment, Lessee shall have the right to terminate this Lease without any further liability or payment to Lessor upon ten (10) days notice to Lessor. In such case, Lessor and Lessee will also cooperate to attempt to find an alternative location for the Public Pool Facilities and Equipment that is suitable for Lessee’s purposes on other property owned or controlled by Lessor or its Affiliates, but Lessor makes no representation and does not provide any assurance that any such alternative location can be found or will be available. Lessor and Lessee agree that the inability to locate or agree on an alternative location will not affect the Parties’ other rights and obligations under this Lease, including Lessee’s right to terminate as provided in the previous sentence.

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3.14 Events of Default.

3.14.1 Lessee Event of Default. Each of the situations set forth below shall constitute a breach of this Lease by Lessee (each a "Lessee Event of Default"), and shall entitle Lessor to exercise the remedies set forth in this Lease:
(a) Failure by Lessee to pay any installment of Rent or any other payment due hereunder, where such failure to pay continues for a period of ten (10) days after written notice of such non-payment from Lessor.
(b) Failure by Lessee to comply with any of the material provisions of this Lease and, unless otherwise expressly provided for hereunder, such failure to comply continues for more than thirty (30) days from the date on which Lessor provides written notice of such breach to Lessee; provided that such thirty (30) day period shall be extended by such longer period of time as may be reasonably necessary for Lessee to cure such breach if such breach cannot reasonably be cured within a thirty (30) day period so long as Lessee is diligently pursuing such cure.

3.14.2 Lessor Event of Default. The failure by Lessor to comply with any of the material provisions of this Lease and, unless otherwise expressly provided for hereunder, such failure to comply continues for more than thirty (30) days from the date on which Lessee provides written notice of such breach to Lessor; provided that such thirty (30) day period shall be extended by such longer period of time as may be reasonably necessary for Lessor to cure such breach if such breach cannot reasonably be cured within a thirty (30) day period so long as Lessor is diligently pursuing such cure shall constitute a breach of this Lease by Lessor (each a "Lessor Event of Default"), and shall entitle Lessee to exercise the remedies set forth in this Lease.

3.15 Actions in Case of Default.

3.15.1 For Lessor. Upon each occurrence of a Lessee Event of Default, and after expiration of all applicable notice and cure periods, Lessor may at any time subsequent to such breach and at its discretion exercise its rights and remedies under California Civil Code section 1951.2 or any successor statute thereto.

3.15.2 For Lessee. Upon the occurrence of a Lessor Event of Default, and after expiration of all applicable notice and cure periods, Lessee may at any time subsequent to such breach and at its discretion:
(a) terminate this Lease;
(b) specifically enforce this Lease and compel compliance by Lessor with its obligations under this Lease; and/or
(c) take such action and recover such damages as provided for at law or in equity.

4. Installation of Public Pool Facilities and Equipment.

4.1 Installation.

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(a) Lessee shall be responsible for obtaining all Permits at Lessee’s sole cost and expense;
(b) Lessee shall be allowed access to the Property for the installation of the Public Pool Facilities and Equipment commencing on the Effective Date;

4.2 No Lessor Liability. The installation of the Public Pool Facilities and Equipment is an exclusive obligation of Lessee. The Parties hereby agree that Lessor shall be released from any liability arising out of the installation of the Public Pool Facilities and Equipment at the Property by Lessee, its contractors, suppliers, subcontractors, designers, architects, engineers, external consultants and, in general, any other person or entity acting on behalf of Lessee in the installation of the Public Pool Facilities and Equipment (except for any work or action directly performed by Lessor or by Lessor’s representatives, contractors or subcontractors).

4.3 Ownership of Public Pool Facilities and Equipment. Lessor agrees that all Public Pool Facilities and Equipment installed or placed on any portion of the Property by Lessee and its successors or assigns, whether real, personal or mixed, shall remain the property of Lessee and shall be removable by Lessee at any time.

Lessor further acknowledges and agrees that notwithstanding that the Public Pool Facilities and Equipment may be fixtures and notwithstanding the manner of installation of the Public Pool Facilities and Equipment, the Public Pool Facilities and Equipment shall not become a part of the real property comprising the Property, and Lessor shall have no ownership interest in the Public Pool Facilities and Equipment.

The Public Pool Facilities and Equipment may not be sold, leased, assigned, mortgaged, pledged or otherwise alienated or encumbered by Lessor with Lessor’s fee or leasehold interest in the Property. Without limiting the generality of the foregoing, Lessor hereby waives any statutory or common law lien that it might otherwise have in or to the Public Pool Facilities and Equipment or any part thereof and agrees that, notwithstanding the occurrence of a Lessee Event of Default under this Lease beyond all applicable notice and cure periods (including those granted to Lessee's lender(s)), Lessee or Lessee's lender(s) (or its designee) may remove the Public Pool Facilities and Equipment from the Property.

The Lessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the Lessee, in which the Lessor shall not have any interest, and may be modified or removed by the Lessee at any time, provided that the Lessee shall repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items. Nothing in this Lease shall prevent the Lessee from purchasing or leasing items to be installed pursuant to this Section under a lease or conditional sale agreement, or subject to a vendor's lien or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property. Should Lessee finance the acquisition of certain equipment or and other personal property and goods, that are or will be located upon or affixed to the Property (the "Financed Equipment”), the Financed Equipment shall be and remain equipment or other personal property and shall not be considered part of the Property. Title to and the personal

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property nature of the Financed Equipment will vest in the Lessee and be subject only to the first priority security interest of the Equipment Lender and be controlled by the terms of the Financing Agreement. The Lessor shall not have any interest in, liability with respect to, right or claim to and lien on the Financed Equipment. The Lessee and the Equipment Lender may operate, repair, replace, maintain, remove or modify such Financed Equipment or other personal property at any time. Pursuant to the Financing Agreement the Equipment Lender is entitled to exercise certain rights and remedies with respect to the Financed Equipment and the Financing Agreement permits the Lessee and the Equipment Lender to take certain actions with respect to the Financed Equipment.

5. Miscellaneous.

5.1 Construction of Certain Terms and Phrases. Unless the express usage or the context of this Lease otherwise requires: (a) words of either gender include the other gender; (b) words using the singular or plural also include the plural or singular, respectively; (c) the terms "hereof," "herein," "hereby," "hereto" and similar words refer to this entire Lease and not to any particular Article, Section, Clause, Exhibit, or Exhibit or any other subdivision of this Lease; (d) references to "Article," "Section," "Clause," or "Exhibit" are to the Articles, Sections, Clauses, and Exhibits, respectively, of this Lease; (e) the words "include" or "including" shall be deemed to be followed by "without limitation" or "but not limited to" whether or not they are followed by such phrases or words of like import; (f) references to "this Lease" or any other Lease or document shall be construed as a reference to such Lease or document, including any exhibits, appendices and schedules thereto, as amended, modified or supplemented and in effect from time to time; (g) reference to a law, regulation or ordinance includes any amendment or modification thereof; and (h) a reference to a person includes its successors and assigns. In the event of a conflict between the Exhibit and the provisions of this Lease, the latter shall prevail.

5.2 Amendments. This Lease, including all Exhibits attached hereto, contains all of the covenants, provisions, Leases, conditions and understandings between Lessor and Lessee concerning the Property and any other matter covered or mentioned in this Lease, and no prior Lease or understanding, oral or written, express or implied, pertaining to the Property or any such other matter shall be effective for any purpose. No provision of this Lease may be amended or added to except by an Lease in writing signed by the parties hereto or their respective successors in interest. The parties acknowledge that all prior Leases, representations and negotiations are deemed superseded by the execution of this Lease to the extent they are not expressly incorporated herein.

5.3 Taxes. Lessee shall pay all personal property taxes, business or license taxes or fees, excises, assessments, levies, fees or other charges which are assessed, levied, charged or imposed by any public authority against Lessee in connection with Lessee’s occupancy and use of the Property or the construction, installation, operation, maintenance, repair or replacement of the Public Pool Facilities and Equipment.

Lessor shall be responsible for all real property taxes and assessments relating to the Property, all taxes and assessments computed upon the basis of the net income of Lessor or payments derived from the Property by Lessor, and all business or license taxes or fees, excises,

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assessments, levies, fees or other charges which are assessed, levied, charged or imposed by any public authority against Lessor in connection with Lessor’s lease of the Property to Lessee.

When possible, Lessee shall cause the Public Pool Facilities and Equipment to be assessed and billed separately from all real property taxes payable by Lessor. If the Public Pool Facilities and Equipment shall be assessed together with Lessor's real property, Lessee shall pay Lessor any taxes attributable to the Public Pool Facilities and Equipment within thirty (30) days after receipt of a written statement setting forth the taxes applicable to such Public Pool Facilities and Equipment. Lessor and Lessee agree to reasonably cooperate with each other to reduce any taxes, assessments and charges that may be levied or assessed with respect to the Public Pool Facilities and Equipment. Lessor and Lessee shall each have the right to contest the legal validity or amount of any taxes for which either party is responsible under this Lease, and may institute such proceedings as it considers necessary with the reasonable cooperation of the other party.

5.4 Headings. The headings in this Lease are solely for convenience and ease of reference and shall have no effect in interpreting the meaning of any provision of this Lease.

5.5 Binding Effect. This Lease and its rights, privileges, duties and obligations shall inure to the benefit of and be binding upon each of the Parties hereto, together with their respective successors and permitted assigns.

5.6 Memorandum of Lease; Fixture Filing. Lessor hereby agrees to execute within ten (10) days after receipt of Lessee's request and authorizes Lessee to record a memorandum of this Lease in the land registry or title records of the county where the Property is located or other applicable government office. Lessee (or Lessee's lender) shall be entitled to, and is hereby authorized to, file one or more precautionary UCC financing statements or fixture filings in such jurisdictions as it deems appropriate with respect to the Public Pool Facilities and Equipment in order to provide notice of its ownership of the Public Pool Facilities and Equipment.

5.7 No Brokers. Each party represents and warrants to the other that it has dealt with no broker, agent or other Person in connection with this Lease and that no broker, agent or other Person brought about this Lease, and each party agrees to indemnify and hold the other harmless from and against any claims by any other broker, agent or other Person claiming a commission or other form of compensation by virtue of having dealt with the indemnifying party with regard to this Lease.

5.8 Waiver. The failure, delay or forbearance by either Party to exercise any of its rights or remedies under this Lease or to provide written notice of any default to a defaulting party will not constitute a waiver of such rights or remedies. No Party will be deemed to have waived any right or remedy resulting unless it has made such waiver specifically in writing. The waiver by either Party of any default or breach of any term, condition or provision herein contained shall not be deemed to be a waiver of any subsequent breach of the same term, condition or provision, or any other term, condition or provision contained herein.

5.9 Remedies Cumulative. No remedy herein conferred upon or reserved to Lessor or Lessee shall exclude any other remedy herein or at law, but each such remedy shall be cumulative

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and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.

5.10 Notices. All Rent and other sums payable by Lessee to Lessor hereunder shall be paid to Lessor at the address set forth below, or to such other Persons and/or at such other places as Lessor may hereafter designate in writing. Any notice required or permitted to be given hereunder must be in writing and may be given by personal delivery (including delivery by nationally recognized overnight courier or express mailing service), or by registered or certified mail, postage prepaid, return receipt requested, addressed to Lessee at the address(es) or to Lessor at the address(es) designated below. Either party may, by written notice to the other, specify a different address for notice purposes. Notice given in the foregoing manner shall be deemed given (i) upon confirmed transmission if sent by facsimile transmission, provided such transmission is prior to 5:00 p.m. on a Business Day (if such transmission is after 5:00 p.m. on a Business Day or is on a non-business day, such notice will be deemed given on the following Business Day), (ii) when actually received or refused by the party to whom sent if delivered by a carrier or personally served or (iii) if mailed, on the day of actual delivery or refusal as shown by the certified mail return receipt or the expiration of three (3) Business Days after the day of mailing, whichever first occurs.

To Lessor: McFarland Recreation and Park District
100 2nd Street
McFarland, CA 93250
With a copy:

To Lessee City of McFarland
401 W Kern Avenue
McFarland, CA 93250
With a copy: Hodges Law Group
Attn: Nathan M. Hodges
1925 G Street
Bakersfield, CA 93301
Lessee shall have the right to add any lender providing financing to Lessee as a party entitled to receive copies of any Notices delivered under this Lease.

5.11 Severability. If one or more provisions of this Lease are found by a court of competent jurisdiction over the Parties hereto to be illegal, invalid or unenforceable, in whole or in part, the remaining terms and provisions of this Lease shall remain in full force and effect disregarding such illegal, invalid or unenforceable portion and such court shall be empowered to modify such illegal, invalid or unenforceable provision to the extent necessary to make this Lease enforceable in accordance with the intent or purposes of the Parties expressed in this Lease to the fullest extent practicable and as permitted by applicable by law.

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5.12 No Third-Party Beneficiary. This Lease is solely for the benefit of the Parties hereto and no right or cause of action shall accrue by reason hereof for the benefit of any third party not a party hereto.

5.13 Quiet Enjoyment. Lessor warrants that Lessee shall peaceably hold and enjoy the Property and any and all other rights granted by this Lease for the entire Term without hindrance, interruption, suit, trouble or interference of any kind by Lessor or any other Person or entity claiming (whether at law or in equity) by, through or under Lessor. Lessor shall protect and defend the right, title and interest of Lessee hereunder from any other rights, interests, title and claims.

5.14 Choice of Law. This Lease shall be construed in accordance with the laws of the State of California and jurisdiction for any action filed related to this Agreement in the Superior Court of the State of California, County of Kern.

5.15 Dispute Resolution. The Parties shall negotiate in good faith and attempt to resolve any dispute, controversy or claim arising out of or relating to this Lease ("Dispute") within 30 days after the date that a Party gives written notice of such Dispute to the other Party.

If, after such negotiation in accordance with Section 5.15, the Dispute remains unresolved, either Party may require that a non-binding mediation take place. In such mediation, representative of the Parties with authority to resolve the dispute shall meet with a mutually agreed upon mediator. If the Parties are unable to agree upon a mediator, then either Party is hereby empowered to request the American Arbitration Association to appoint a mediator. The mediator’s fee and expenses shall be paid one-half by each Party. If mediation is not successful, either part may allege any legal remedy available to it under this lease.

5.16 Further Assurance. Upon the receipt of a written request from the other Party, each Party shall execute such additional documents, instruments, estoppels and assurances and take such additional actions as are reasonably necessary and desirable to carry out the terms and intent hereof, including, but not limited to, an interconnection agreement. Neither Party shall unreasonably withhold, condition or delay its compliance with any reasonable request made pursuant to this Section 5.16.

In furtherance of the foregoing, each Party agrees that it shall, at any time and from time to time during the Term of this Lease and within (10) days after a written request by the other Party, execute, acknowledge and deliver to the requesting Party a written statement certifying that this Lease is unmodified and in full force and effect (or modified and stating the modifications), the dates to which the payments and any other charges have been paid, and that there are no defaults existing (or that defaults exist and stating the nature of such defaults), and stating such other facts as the requesting Party may reasonably provide. The failure of a Party to deliver any such certificate within such time shall be conclusive upon such Party that this Lease is unmodified and in full force and effect, all payments to such Party are current, there are no defaults existing, and such other facts are true and correct.

5.17 Counterparts. This Lease may be executed in counterparts, which shall together constitute one and the same Lease. Facsimile signatures shall have the same effect as original

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signatures and each Party consents to the admission in evidence of a facsimile or photocopy of this Lease in any court or arbitration proceedings between the Parties.

5.18 Entire Lease. This instrument represents the full and complete Lease between the Parties hereto with respect to the subject matter contained herein and supersedes all prior written or oral Leases between said Parties with respect to said subject matter. The exhibits attached hereto are made a part of this Lease.

5.19 No Merger. The voluntary or other surrender of this Lease by Lessee or a mutual termination thereof shall not work as a merger and shall, at the option of Lessor, either (a) terminate all or any existing subleases, or (b) operate as an assignment to Lessor of Lessee's interest under any or all such subleases.

5.20 Time. Time is of the essence with respect to performance of every provision of this Lease in which time or performance is a factor.

5.21 Business Day. A "Business Day" is Monday through Friday, excluding holidays observed by the United States Postal Service and reference to 5:00 p.m. is to the time zone of the recipient. Whenever action must be taken (including the giving of notice or the delivery of documents) under this Lease during a certain period of time (or by a particular date) that ends (or occurs) on a non-business day, then such period (or date) shall be extended until the immediately following Business Day.

5.22 Accord & Satisfaction. No payment by Lessee or receipt by Lessor of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Lessor may accept such check or payment without prejudice to Lessor's right to recover the balance of such Rent or pursue any other remedy provided in this Lease. Lessee agrees that each of the foregoing covenants and Leases shall be applicable to any covenant or Lease either expressly contained in this Lease or imposed by any statute or at common law.

5.23 No Partnership. Lessor does not, in any way or for any purpose, become a partner of Lessee in the conduct of its business, or otherwise, or joint venturer or a member of a joint enterprise with Lessee by reason of this Lease.

5.24 Survival. It is expressly agreed that the rights, duties and obligations contained in Sections 3.9, 3.10, 3.11, and 3.14 shall survive the completion or any termination of this Lease and shall remain in full force and effect.
[Signatures on Following Page]

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

LESSOR: LESSEE:

McFarland Recreation & Park District The City of McFarland By: By:

Title: Title:

Date: Date:

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EXHIBIT A
APN # 201-070-44
Legal Description of Property
The Leased Premises consist of an approximately 23,444.50-square-foot portion of real property located within the southwestern area of Assessor’s Parcel Number (APN) 201-070-44, County of Kern, State of California, as shown and delineated on Exhibit D, which is incorporated herein by reference.

The Leased Premises include the public swimming pool and all associated improvements, including but not limited to the pool basin, pool deck, restrooms, locker/shower facilities, mechanical and pump rooms, equipment and tool storage areas, and all appurtenant structures, utilities, and improvements customarily used for pool operation and maintenance.

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EXHIBIT B
Glossary of Terms
"Affiliate" of a specified Person means any Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, such specified Person. As used in this definition of Affiliate, the term "control", "controlled by" and "under common control with," means (a) the ownership, directly or indirectly, of 50% or more of the equity interest in a Person, or (b) the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. "Lease" means this Lease, in its entirety, together with its Exhibits, which are hereby incorporated by reference.
"Business Day" shall have the meaning set forth in Section 5.21 of this Lease. "Effective Date" shall have the meaning set forth in the preamble to this Lease. "Environmental Requirements" means all applicable present and future federal, state and local laws, statutes, rules, ordinances, codes and regulations relating to environmental protection, public health and safety on, under, or about the Property, including, without limitation, the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9600 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11000 et seq., and the Clean Water Act, 33 U.S.C. § 1251 et seq., and each of their state and local counterparts presently in effect or amended or promulgated in the future. "Existing Lender" shall have the meaning set forth in Section 2.1(c) of this Lease. "Force Majeure" means events beyond the reasonable control of the affected Party, and which could not reasonably be prevented or avoided by the affected Party, which prevent or delay the effected Party from performing its obligations under or related to this Lease, including, without limitation, acts of God, fire, floods, storms, earthquake, unusually severe weather, wars, riots, sabotage, civil disturbance, acts of civil or military authorities, terrorist acts affecting the Property, labor disputes, or the act or inaction by any governmental authority which delays, prevents or prohibits the effected Party from carrying out its respective obligations under this Lease; provided that the definition of Force Majeure shall in no event include the inability of a Party to meet its financial obligations under this Lease. Any force majeure delay shall automatically extend the date for performance under this Lease by one (1) day for every one (1) day of delay. "Future Lender" shall have the meaning set forth in Section 3.10.3 of this Lease. "Hazardous Materials" means and includes any substance, material, waste, pollutant, or contaminant listed or defined as hazardous or toxic under any Environmental Requirements, asbestos and petroleum, including crude oil or any fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas).

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"Lessee" shall have the meaning set forth in the preamble to this Lease. "Lessee Event of Default" shall have the meaning set forth in Section 3.14.1 of this Lease. "Lessor" shall have the meaning set forth in the preamble to this Lease. "Lessor Event of Default" shall have the meaning set forth in Section 3.14.2 of this Lease. "Legal Requirements" All laws, statutes, orders, judgments, ordinances, regulations, codes or directives of any governmental authorities now or hereafter applicable to the Property and this Lease.
"Notices" shall have the meaning set forth in Section 5.10 of this Lease.

Public Pool Facilities and Equipment means the pool site, equipment and associated dwellings necessary for public pool operation.
"Permits" means any and all approvals, permits, permissions, licenses, authorizations, consents, certifications, orders, waivers, exemptions, variances, franchises, filings, declarations, rulings and registrations from or issued by a government authority required under applicable Legal Requirements for Lessee to install, operate and maintain the Public Pool Facilities and Equipment on the Property.
"Permitted Use" means the use of the Property as a Public Pool, including but not limited to installation, maintenance, operation, repair and replacement of the Public Pool Facilities and Equipment.
"Person" means any corporation, limited liability company, any form of partnership, any joint venture, trust, estate, governmental authority or other legal or commercial entity or any natural person.
"Property" shall have the meaning set forth in the recitals to this Lease. "Renewal Term" or “Renewal Terms” means any extension of the Term pursuant to Section 3.2.2.
"Rent" means an annual amount of $1.00 paid by Lessee to Lessor. “Sublessee” shall have the meaning set forth in the preamble to this Lease. "Term" means a term beginning on the Effective Date and ending on the last day of the calendar month of the thirty (30) year anniversary of this Lease, subject to any Renewal Terms, if applicable. The Term may be extended in accordance with the terms and conditions set forth in this Lease.
"Transaction" shall have the meaning set forth in the recitals to this Lease.

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EXHIBIT C
Insurance Coverage

1. Lessee Insurance Requirements.

1.1 Lessee Required Coverages. Lessee shall carry and maintain with carriers or self insurance, as a minimum, the following insurance coverages:
(a) Workers Compensation Insurance and Employers Liability. In accordance with the laws of the state of where work may be done with limits for employers liability in the minimum amount of $1,000,000 for each occurrence and $1,000,000 for each occurrence of disease on a per employee basis;
(b) Commercial General Liability. One million dollars ($1,000,000) per occurrence/two million ($2,000,000) in the aggregate for bodily injury, personal injury and property damage, products and completed operations:
(i) $300,000 for damage to rented Property, per occurrence; (ii) $10,000 for medical expenses, per person;
(iii) $1,000,000 for personal and advertising injury; and (iv) $2,000,000 for product and completion aggregate
(c) Commercial Automobile Liability, Any Auto. One million dollars ($1,000,000_ per accident/two million dollars ($2,000,000) aggregate for bodily injury and property damage. scheduled, non-owned and hired automobiles. (d) Professional Liability Insurance. The insurance shall cover Lessee and its design consultant(s) for one million dollars ($1,000,000) per claim and $2,000,000 in the aggregate; and

1.2 Policy Endorsements. Insurance coverages required to be maintained by Lessee under this Lease shall:
(a) provide a severability of interests or cross liability clause for Commercial General Liability Insurance;
(b) except in the case of worker’s compensation insurance and other statutory insurances where it would be inappropriate, name Lessor and, as additional insured’s.

2. Lessor Insurance Coverage.

2.1 Lessor Required Coverages. Lessor shall carry and maintain with carriers or self insurance, as a minimum, the following insurance coverages:

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(a) Lessor shall, at Lessor’s sole cost and expense, maintain during the Term and beginning with any Commencement of Construction, a minimum level of commercial general liability insurance of one million dollars($1,000,000) per occurrence and two million dollars ($2,000,000) in the aggregate for property damage, personal injury or deaths of persons occurring in or about the Property during the Term (including loss of use thereof arising out of Lessor’s operations and contractual liabilities), and Lessor shall carry property insurance written on an “all risks” basis covering the Property. Such coverage shall from such companies and on such other terms and conditions as Lessor may from time to time reasonably determine.

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EXHIBIT D
Maps
Area within APN # 201-070-44 as aforementioned and defined as Public Pool Facilities and Equipment.

City of McFarland
City Council Meeting

STAFF REPORT
Agenda Item No. 3.

Section: ADMINISTRATIVE
AGENDA
Meeting Date: December 15,
2025
TO: Honorable Mayor and Council Members
FROM: Diego Viramontes, City Manager
Serrena McCuan, Human Resources Director
SUBJECT: Approval of Resolution No. 2025-165 A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF MCFARLAND APPROVING THE EMPLOYMENT

AGREEMENT BETWEEN THE CITY OF MCFARLAND AND ADRIAN OLMOS

FOR THE POSITION OF CHIEF OF POLICE
SUMMARY:

Following completion of the recruitment and interview process, Adrian Olmos has been selected as the City’s next Chief of Police. Mr. Olmos brings more than 23 years of progressive law enforcement experience and is currently serving in a leadership capacity, where he has been instrumental in supporting and performing core Chief of Police functions. He holds a Bachelor’s Degree, maintains all required POST certifications, and has demonstrated strong administrative, operational, and community-focused leadership. His experience includes supervision of sworn and civilian personnel, policy development, regulatory compliance oversight, and direct engagement with community and city personnel.

The Chief of Police recruitment was posted in late October, with outreach and applicant review occurring immediately. Applications were screened promptly, and interviews were conducted shortly thereafter to ensure continuity of leadership within the Police Department. The recruitment process identified Mr. Olmos as the most qualified candidate, with the added benefit of institutional knowledge, proven leadership, and an established relationship with both department staff and the community. His selection allows for a smooth transition and immediate continuity of operations.

Based on this review, the compensation requested in the proposed employment agreement is reasonable, competitive, and consistent with regional benchmarks.

FINANCIAL IMPACT:

The financial impact to the General Fund's budget will be $135,000 annually plus benefits.

RECOMMENDATION:

Staff request the City Council to approve the employment agreement for Adrian Olmos as the Chief of Police, including the outlined terms, salary and terms of service.

ATTACHMENTS:

1. Exhibit A

RESOLUTION NO. 2025-165

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MCFARLAND APPROVING

THE EMPLOYMENT AGREEMENT BETWEEN THE CITY OF MCFARLAND AND

ADRIAN OLMOS FOR THE POSITION OF CHIEF OF POLICE
WHEREAS, the City conducted a recruitment and interview process for the position of Chief of Police, which was posted in late October and included prompt outreach, application review, and interviews to ensure continuity of leadership within the Police Department; and WHEREAS, Adrian Olmos holds a Bachelor’s Degree, maintains all required POST certifications, and has demonstrated strong administrative, operational, and community-focused leadership, including supervision of sworn and civilian personnel, policy development, compliance oversight, and community engagement; and
WHEREAS, the Chief of Police shall receive an annual salary of $135,000, with benefits as provided under the City's employment policies and applicable agreement.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of McFarland that it hereby finds and determines as follows:

1. The City Council hereby approves the employment agreement for Adrian Olmos, setting the annual salary at one hundred and thirty-five thousand dollars, ($135,000) to be paid in bi-weekly pay periods.

2. The City Manager has full approval to execute the employment agreement with Adrian Olmos, attached hereto as Exhibit "A", for the Chief of Police position, which shall take effect December 15th, 2025.

3. The City Clerk shall certify the passage and adoption of this resolution.

4. This resolution is effective immediately.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of McFarland on December 15, 2025 by the following vote:

Aye Nae Abstain Absent
Saul Ayon
Ricardo Cano
Anita Gonzalez
María T. Pérez
Martin Gutierrez

CITY OF MCFARLAND
____________________________
Saul Ayon, Mayor
ATTEST:
_____________________________
Erika De La Cruz, City Clerk
I, _________________________, City Clerk of the City of McFarland, California, DO HEREBY CERTIFY that the foregoing resolution is a true and accurate copy of the Resolution passed and adopted by the City Council of the City of McFarland on the date and by the vote indicated herein.

APPROVED AS TO FORM:
_____________________________
Nathan Hodges, City Attorney

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT
This employment agreement (“Agreement”) is made on this 15th day of December 2025, by and between the City of McFarland, a Municipal Corporation (“City”), and Adrian Olmos (“Olmos”). The City and Olmos are collectively referred to as the “Parties” where appropriate.

Once effective, this Agreement shall replace and supersede any prior employment contracts or agreements between the Parties, which are hereby deemed rescinded and of no further effect, except where indicated within this Agreement.

RECITALS:

WHEREAS, the City Council now wishes to engage the services of Olmos as the City’s Chief of Police; and
WHEREAS, the position of Chief of Police is an “at will” position, not subject to the City’s personnel rules; and
NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth hereinafter, the Parties mutually agree as follows:

AGREEMENT

1. Incorporation. The Parties incorporate the foregoing recitals as if fully set forth herein verbatim.

2. Hire. City acknowledges that it will hire Olmos as its Chief of Police as of December 15th, 2025, (“Effective Date”). Olmos and the City agree to the terms and conditions of this Agreement. Olmos shall remain in the exclusive hire of City during the term of this Agreement and shall neither accept other employment nor become employed by any other employer until the end of the Term or earlier termination of this Agreement.

3. “At-Will” Employment. Olmos’s employment with City is at the sole will, discretion, and pleasure of the City. The City Manager may fix any such additional terms and conditions of employment, as they may determine from time to time, relating to Olmos’s performance, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this Agreement, the City Municipal Code, or any other law.

The terms of the City’s personnel rules, policies, procedures, ordinances, or resolutions (collectively “Personnel Policies”) shall not apply to Olmos unless made expressly applicable, except that all policies and regulations related to the prevention of harassment, discrimination and retaliation shall apply to Olmos.

This Agreement is not intended to, or does it confer any right to any property interest in continued employment, or any due process property right to a hearing before or after a decision by the City Manager to terminate Olmos’s employment. Subject to State and

EMPLOYMENT AGREEMENT
Federal law, nothing contained in this Agreement shall in any way prevent, limit or otherwise interfere with the right of the City to terminate the services of Olmos.

4. Duties.
a. Chief of Police. Employee accepts employment with the City as its Chief of Police and agrees to perform all functions, duties, and services as promulgated by City regulations and procedures, the City Manager, and the Chief of Police job description, including, but not limited to the following:
• Plans organizes, directs, and supervises the activities of police personnel in preserving order, protecting life and property, and enforcing laws and ordinances. • Prepares the Department budget and controls Department expenditures. • Makes recommendations for the purchase of equipment and supplies. • Plans for future departmental growth, with regard to additional police services and research programs relative to their specific application to the Department and community. • Reviews Department operations, researches modern police management methods, and formulates and enforces rules, procedures, and policies for efficient operation of the Department.
• Works with individual Citizens and community groups on law enforcement problems and to improve police-community relations.
• Attends county, regional, and State police conferences as needed, and meetings with other public officials.
• Investigates and determines proper courses of action on citizen complaints. • Coordinates law enforcement activities with the activities of other City departments and other law enforcement agencies.
• Researches and recommends the adoption of new, or the deletion of old, ordinances for the overall benefit of the community.
• Reviews the evaluation of employee performance, investigates personnel problems, and takes whatever action is deemed appropriate.
• Directs the development and implementation of a departmental in-service training program. Appears as a guest speaker for business, civic, school, or other community groups.
• Approves and submits all monthly and yearly departmental statistical reports. • Interviews and makes recommendations on the employment of new personnel and supervises background investigations on police officer applicants. • Makes recommendations on promotions, transfers, or dismissals. Prepares special reports related to department operations.
• May be assigned special projects or additional areas of responsibility by the City Manager. • Makes every reasonable effort to continually improve the manner in which the job is performed and increase the quality of service to the public.

5. Term. Except as hereinafter described, the term of this Agreement shall be for three (3) years commencing on the Effective Date. The term of this contract shall automatically renew for an additional one (1) year on the effective date after the initial - three (3) year term, unless mutually agreed by both parties to renegotiate the terms of this contract. The

EMPLOYMENT AGREEMENT
termination of this contract may be accomplished pursuant to the provisions of Section 6 of this Agreement.

6. Termination. Olmos’s “at-will” employment as Chief of Police may be terminated as follows:
a. Resignation. If Olmos elects to resign at any time during the term of this Agreement, he may do so upon giving City thirty (30) days' written notice.

Termination pursuant to such action shall occur thirty (30) calendar days after service of said notice, or on such other date as may be agreed to by the Parties. b. Retirement. If Olmos elects to retire, He shall inform City, in writing, at least thirty (30) days prior to the effective date of such retirement. City shall cooperate fully with Employee to provide all information in a timely manner. c. Termination “Without Cause.” City reserves the right to terminate this Agreement and Olmos's employment as Chief of Police at any time, “without cause” or advance notice.
d. Termination “With Cause.” The City reserves the right to terminate this Agreement and Olmos’s employment at any time, “with cause.” “Cause” shall include, but not be limited to:
i. Willful misconduct or gross negligence;
ii. Theft, or attempted theft, financial mismanagement, material dishonesty, willful or persistent breach of duties, engaging in conduct tending to bring embarrassment or disrepute to the City, unauthorized or excessive absences; iii. A formal investigation commissioned by the City Council and conducted by a third-party investigator hired by the City Council in which the City Council has determined that the Employee has engaged in unlawful discrimination or harassment of Employees or any third party while on City Premises or on City time. City is not required to wait until Employee has exhausted any appeal rights prior to terminating this Agreement “for cause;” iv. Conviction of any felony, or for any misdemeanor involving moral turpitude, corruption, or dishonesty. “Conviction” shall include any guilty plea, plea of nolo contendere, or any other disposition other than a dismissal of charges or acquittal. City is not required to wait until Employee has exhausted any appeal rights prior to terminating this Agreement “for cause;” v. Olmos’s death; or
vi. If Olmos is determined by a court of competent jurisdiction of the State of California’s Fair Political Practices Commission to have knowingly and unlawfully participated in a governmental decision I which he had a conflict of interest as defined in Government Code Section 87100 et seq. or Government Code Section 1090 et seq.;
vii. Olmos’s permanent disability if such disability precludes Olmos from performing His essential job duties for more than six (6) cumulative months

EMPLOYMENT AGREEMENT
after attempts at a reasonable accommodation pursuant to the Americans with Disabilities Act and/or California’s Fair Employment & Housing Act.

7. Salary and Benefits. Olmos’s salary and other benefits for all work or services called for under this Agreement shall be as follows:

A. Salary. Commencing on the Effective Date, Olmos’s annual salary shall be one hundred and thirty-five thousand dollars ($135,000) which shall be paid in bi-weekly pay periods. Olmos shall be entitled to a Cost-of-Living Adjustment (“COLA”) during each year of this agreement. Olmos will receive a 3% Cost of Living Adjustment (COLA) to base salary on each anniversary of this Agreement for the duration of the contract. Any salary increases in addition to COLA shall be implemented by written amendment to this Agreement and upon approval by the City Council.

B. Vacation. Olmos shall cash out the vacation he has accrued as the Captain and shall receive eighty (80) hours of vacation leave, commencing on the effective date. At the end of each year following the effective date, any unused hours shall be cashed out prior to his accrual of an additional eighty (80) hours.

C. Sick Leave. Olmos shall keep the sick leave he has accrued as the Captain and shall continue to accrue eight (8) hours of sick leave per month of employment. The balance of sick leave shall not exceed any maximum accrual amounts set forth in the City's Employee Handbook. Unused sick leave will not be paid out upon termination or expiration of this Agreement.

D. Administrative Leave. Olmos shall cash out the administrative leave accrued as Captain and will continue to receive forty (40) hours of administrative leave per year, commencing on the effective date Administrative leave will not carry over calendar years. At the end of each year of Olmos’ employment, any unused hours shall be cashed out prior to his accrual of an additional forty (40) hours.

E. Holiday and Other Leaves. Olmos shall receive the same leaves, holidays, and other time off as provided to other employees at the City.

F. Health Insurance Benefits. City shall provide health insurance coverage for Olmos and his family consistent with the health insurance benefits provided to City employees.

Olmos may waive this health insurance coverage so long as he has proof of other group coverage in accordance with the Affordable Care Act, (i.e. is not purchasing coverage from the exchange).

G. Term Life Insurance. The City shall pay the premiums for a group life insurance policy consistent with the City employee handbook. Olmos shall name the beneficiary of the life insurance policy, provided said beneficiary has and maintains an insurable interest in Olmos.

EMPLOYMENT AGREEMENT
H. Vehicle. Olmos shall be assigned a take home vehicle and the City shall be responsible for all associated maintenance and fuel costs associated with the use of such vehicle.

Olmos must adhere to all City policies and procedures regarding the use of City vehicles.

I. Cell Phone. City shall provide Olmos with a cell phone purchased by City to be used by Olmos exclusively for performance of His duties under this Agreement and City shall pay the monthly charges for the cell phone data usage. Alternatively, at Olmos’s election, City will pay Olmos an allowance of $50.00 per month for use toward His personal cell phone and data plan. Olmos acknowledges that use of the City provided cell phone, or his personal cell phone, for City business may be subject to such usage to disclosure under the California Public Records Act.

J. Retirement. City represents and Olmos acknowledges that City is not a CalPERS agency for retirement purposes. The City shall contribute the equivalent of ten percent (10%) of Olmos’s salary annually to Olmos’s 401(k) or deferred compensation retirement account. Olmos shall choose whether he wants the contribution made to His 401(k) or deferred compensation account, or a combination of both.

K. Expenses. City shall reimburse Olmos for all reasonable out-of-pocket expenses incurred while performing the duties described in this Agreement, which may include travel, meals, lodging expenses, and parking fees. Olmos shall submit a receipt and a description of the expenses to the City’s Finance Director within thirty (30) days of the date each expense is incurred as a condition of obtaining reimbursement.

L. Uniform Allowance. Olmos shall receive a uniform allowance of twelve hundred dollars ($1200.00) per year. The allowance is payable as in two (2) equal payments of six hundred dollars ($600.00) paid in the first full pay period in January and the first full pay period in July.

8. Bonding and Indemnification. City shall bear the full costs of any fidelity or other bond required of Olmos under any law or ordinance. City shall defend, save harmless and indemnify Olmos from any and all demands, claims, suits, actions, or other legal proceedings (“Claims”) brought against Him in His individual capacity or in His official capacity as Chief of Police, provided the Claims arise while Olmos is acting within the course and scope of His employment and provided He did not act or fail to act because of actual fraud, corruption or malice. The provision shall not extend to claims brought by City itself or where indemnity is otherwise prohibited by law.

9. Evaluation. The City Manager shall evaluate Olmos after the first six (6) months of the Term of this Agreement. The City Manager shall have the right to establish the format and the forms to be used.

10. Notices. Notices pursuant to this Agreement shall be deemed to be given when personally delivered to the party to whom directed or when deposited in the United States Mail,

EMPLOYMENT AGREEMENT
postage prepaid or by electronic mail (Email) or, if notice is given to City, if sent by confirmed facsimile, addressed as follows:

City Olmos
City Manager, City of McFarland Adrian Olmos
401 West Kern Avenue 9322 Chesaw Ct.

McFarland, California 93250 Bakersfield, California 93312 Email: [email protected] Email:[email protected] Either party may change His or its address by providing written notice to the other party in the manner described herein.

11. General Provisions.

A. Entire Agreement. This Agreement constitutes the complete understanding between the Parties, is fully integrated, and supersedes any and all prior agreements – including the Parties’ Consulting Agreement – promises, representations, or inducements, no matter their form, concerning the subject matter of this Agreement. No subsequent agreements, promises, representations, or inducements will be binding unless recorded in a written document, which specifically references this Agreement and is signed by the Parties or their authorized representatives. The Parties acknowledge that this Agreement may be used as evidence in any subsequent proceeding in which either Party alleges a breach of this Agreement or seeks to enforce its terms, provisions, obligations, or as compelled by law.

B. Captions. The headings used in this Agreement are inserted for reference purposes only and shall not be deemed to limit or affect in any way the meaning or interpretation of any of the terms or provisions of this Agreement.

C. Severability. If any provision contained in this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be deemed severable and shall not be affected thereby and same shall remain in full force and effect.

D. Amendment. This Agreement may only be amended by a writing executed by all parties.

E. Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action or motion to enforce the terms or conditions of this Agreement shall be brought only in the Superior Court of California for the County of Kern.

F. Waiver. Waiver by any party of any breach of this Agreement by the other party, whether such waiver be direct or implied, shall not be construed as a continuing waiver or consent to any subsequent breach of this Agreement on the part of the other party.

EMPLOYMENT AGREEMENT
G. Further Assurances. Each party shall execute and deliver such papers, documents, and instruments, and perform such acts as are necessary or appropriate, to implement the terms of this Agreement and the intent of the parties to this Agreement.

H. Assignment. Neither this Agreement, nor any interest in it, may be assigned or transferred by any party without the prior written consent of all the parties. Any such assignment will be subject to such terms and conditions as City may choose to impose.

I. Binding Effect. The rights and obligations of this Agreement shall inure to the benefit of, and be binding upon, the parties to the contract and their heirs, administrators, executors, personal representatives, successors and assigns, and whenever the context so requires, the masculine gender and includes the feminine and neuter, and the singular number includes the plural. This Agreement may be executed in any number of counterparts, each of which shall be considered as an original and be effective as such.

J. Merger And Modification. This contract sets forth the entire Agreement between the parties and supersedes all other oral or written representations. This contract may be modified only in writing, approved by the City Council and signed by all the parties.

K. Attorneys’ Fees. If either party commences any action or proceeding relating to this Agreement or the enforcement of any provision of this Agreement against the other party, the prevailing party, in such action or proceeding, shall be entitled to recover reasonable attorneys’ fees, costs, and all other litigation costs.

L. Execution. This Agreement is effective August 20, 2023 It is the product of negotiation, and all parties are equally responsible for authorship of this Agreement.

Section 1654 of the California Civil Code shall not apply to the interpretation of this Agreement.

M. Non-Interest. Except for Olmos, no officer or employee of City shall hold any interest in this Agreement (California Government Code section 1090).

N. Counterparts. This Agreement may be executed in counterparts and the respective signature pages for each party may thereafter be attached to the body of this Agreement to constitute one integrated Agreement which is as fully effective and binding as if the entire document had been signed at one time.

O. Acknowledgement of Statutes That May Affect Employment Relationship. City and Employee acknowledge that, in addition to the statutes previously referenced in this Agreement, the following statutes shall govern this employment relationship under the circumstances described in the statutes:
a. Government Code section 53243 states that on or after January 1, 2012, any contract executed or renewed between a local agency, such as the City, and an officer or Employee of a local agency, such as Olmos, that provides paid leave

EMPLOYMENT AGREEMENT
salary offered by the local agency to the officer or Employee pending an investigation shall require that any salary provided for that purpose be fully reimbursed if the officer or Employee is convicted of a crime involving an abuse of His office or position.
b. Government Code section 53243.1 states that on or after January 1, 2012, any contract executed or renewed between a local agency, such as the City, and an officer or Employee of a local agency, such as Employee that provides funds for the legal criminal defense of an officer or Employee shall require that any funds provided for that purpose be fully reimbursed to the local agency if the officer or Employee is convicted of a crime involving an abuse of His office or position. c. Government Code section 53243.3 states that on or after January 1, 2012, if a local agency, such as the City, provides, in the absence of a contractual obligation, for any of the payments described in the corresponding article of the Government Code, then the Employee or officer, such as Employee, receiving any payments provided for those purposes shall fully reimburse the local agency that provided those payments in the event that the Employee or officer is convicted of a crime involving the abuse of His office or position.
d. Government Code sections 87100 et seq., section 1090 and section 1126, and all other similar statutory and administrative rules, prohibit conflicts of interest.

During the term of this Agreement, Olmos shall comply with all those requirements of law and shall not engage in any business or transaction or maintain a financial interest which conflicts, or reasonably might be expected to conflict, with the proper discharge of Employee's duties under this Agreement.

Olmos represents that He has reviewed, is familiar with, and agrees to comply fully with each of these provisions if any of these provisions are applicable to him, including that Employee agrees that any cash settlement or severance related to a termination that Employee may receive from City shall be fully reimbursed to the local agency if Employee is convicted of a crime involving an abuse of Employee's office or position.

P. Independent Legal Advice. City and Olmos represent and warrant to each other that each has received legal advice from independent and separate legal counsel with respect to the legal effect of this Agreement or had the opportunity to do so and City and Olmos further represent and warrant that each has carefully reviewed this entire Agreement and that each term thereof is understood and that the terms of this Agreement are contractual and not a mere recital. This Agreement shall not be construed against the Party or its representatives who drafted it or who drafted any portion thereof.
[Signature Page Follows]

EMPLOYMENT AGREEMENT
IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective on the day and year first above written:

Dated: CITY OF MCFARLAND
By: _________________________
Diego Viramontes
Title: City Manager
Dated: EMPLOYEE
By: _________________________
Adrian Olmos
APPROVED AS TO FORM:

By:

Nathan M. Hodges, Esq.

Hodges Law Group
City Attorney
Attachments:

EMPLOYMENT AGREEMENT
Exhibit A: City of McFarland Position Description – Chief of Police