THE SALVATION ARMY OF ORANGE COUNTY

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The CDBG-CV FUNDS shall be disbursed by CITY to SUBRECIPIENT on a bi-monthly basis subject to and upon receipt and approval of a complete bi-monthly activity report from SUBRECIPIENT, with the final payment subject to the satisfaction of the condition precedent of submittal of complete reporting information, as hereinafter more fully set forth. SUBRECIPIENT shall be obligated to perform such duties as would normally extend beyond the term, including, but not limited to, obligations with respect to indemnification, audits, reporting, data retention/reporting, and accounting. Failure to provide any of the required documentation and reporting will cause CITY to withhold all or a portion of a request for reimbursement, or return the entire reimbursement package to SUBRECIPIENT, until such documentation and reporting has been received and approved by CITY. The CITY reserves the right to reduce the amount of CDBG-CV FUNDS to SUBRECIPIENT, or to completely terminate this Agreement, in the CITY's sole discretion, if there is a reduction in CDBG-CV FUNDS provided to the CITY. The CITY reserves the right to reduce the grant application if the CITY's fiscal monitoring indicates that SUBRECIPIENT's rate of expenditure will result in unspent funds at the end of the program years. Amendments in the grant allocation will be made after consultation with SUBRECIPIENT. C. Use of Funds. SUBRECIPIENT agrees to use all federal fttnds provided by CITY to SUBRECIPIENT pursuant to this Agreement to operate said program, as set forth in Exhibit A, attached hereto and by this reference incorporated herehr. SUBREC.IPIENT'S failure to perform as required may, in addition to other remedies set forth in this Agreement, result in readjustment of the amount of funds CITY is otherwise obligated to pay to SUBRECIPIENT hereunder. D. Allowable Costs. SUBRECIPIENT agrees to complete said program within the term of this Agreement, and to use said funds to pay for necessary and reasonable costs allowable under the federal law and regulations to operate said program. Said amounts shall include, but not be limited to, wages, administrative costs, and employee benefits comparable to other similarly situated employees, direct rental assistance to landlords on behalf of eligible residents, and indirect costs. Other allowable program costs are detailed in the budget, as set forth in Exhibit B, attached hereto and by this reference incorporated herein. SUBRECIPIENT shall use all income received from said funds only for the same purposes for which said funds may be expended pursuant to the terms and conditions of this Agreement. SUBRECIPIENT has the ability to adjust line item amounts in the budget with the written approval of the CITY's Executive Director of the Community Development Agency, or designee, so long as the total budget amount does not increase. Pursuant to 2 CFR §200.33 1 (a)(4), the Indirect Cost Rate for the SUBRECIPIENT's award shall be an approved federally recognized indirect cost rate negotiated between the SUBRECIPIENT and the Federal government, or, if no such rate exists, the de min imis indirect cost rate as defined in 2 CFR §200.414(b) Indirect (F&A) costs. For this Agreement, the de minimis indirect cost rate of 10% will apply. E. Licensing; SUBRECIPIENT agrees to obtain and maintain all required licenses, registrations, accreditation and inspections from all agencies governing its operations. SUBRECIPIENT shall ensure that its staff shall also obtain and maintain all required licenses, registrations, accreditation and inspections from all agencies governing SUBRECIPIENT's operations hereunder. Such licensing requirements include obtaining a City business license, as applicable. F. Zoning. SUBRECIPIENT agrees that any facility/property used in furtherance of said program shall be specifically zoned and permitted for such use(s) and activity(ies). Should SUBRECIPIENT fail to have the required land entitlement and/or permits, thus violating any local, state or federal rules and