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as the income of CVOC, fox both tax purposes and for purposes of CVOC's financial statements. It <br />is the intent of the parties that this Agreement be interpreted to provide CVOC with variance <br />powers necessary to enable CVOC to treat the restricted fund as CVOC's assets in accordance with <br />Interpretation No. 42 of Statement No. 116 issued by the Financial Accounting Standards Board, <br />while this Agreement is in effect. <br />3. Program Activities and Sponsorship Policies. CVOC shall hold, manage, invest and <br />reinvest the Fund, shall collect the income and shall pay and disburse the net income and principal <br />for public educational and charitable uses and purposes. All community programs, public <br />information work, fundraising events, processing and acknowledgment of cash and non-cash <br />revenue items, accounts payable and receivable, negotiation of leases and contracts, disbursement of <br />Program funds (including grants), and other activities related to the Program, shall be the ultimate <br />responsibility of CVOC and shall be conducted in the name of CVOC, beginning on the Effective <br />Date. Unless otherwise agreed, and subject to their consent, all personnel to be compensated for <br />working on the Program shall become at-will employees of CVOC on the Effective Date, and shall <br />be subject to the same personnel policies and benefits as are required by law to apply to all <br />employees of CVOC. Unless otherwise agreed, any tangible or intangible property, including <br />intellectual property, such as copyrights, obtained or created in connection with the Program shall <br />be the property of CVOC while this Agreement is in effect. CVOC shall grant to City aroyalty- <br />free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, <br />publish, translate, reproduce and use any and all such tangible, intangible and/or intellectual <br />property. Authority to manage the activities of the Program is delegated to the City, subject at all <br />times to the ultimate direction and control of the CVOC Board of Directors. The City shall abide <br />by the Sponsorship Policies of CVOC as set forth on the attached Exhibit I, which may be amended <br />from time to time with the consent of the City, and which include administration fees, as set forth in <br />attached Exhibit 2, to be paid to the general fund of CVOC from the restricted fund described in <br />Paragraphs 2, and 4 herein. <br />4. Restricted Fund Management /Performance of Charitable Purposes: All of the assets <br />received by CVOC under the terms of this Agreement shall be devoted to the purposes of the <br />Program, within the tax-exempt purposes of CVOC. No item of revenue shall be earmarked to be <br />used in any attempt to influence legislation within the meaning of IRC Section 501(c)(3); no <br />agreement, oral or written, to that effect shall be made between CVOC and any revenue source. <br />CVOC shall not use any portion of the assets to participate or intervene in any political campaign on <br />behalf of or in opposition to any candidate for public office, to induce or encourage violations of <br />law or public policy, to cause any private inurement or improper private benefit to occur, nor to take <br />any other action inconsistent with IRC Section 501(c)(3). <br />5. Reporting. CVOC will provide reports to the City quarterly. As part of its regularly <br />scheduled distribution of statements, CVOC will provide the City with global annual audit and <br />detailed reports insofar as they relate to the money or property transferred to CVOC and distributed <br />by CVOC on behalf of the City. Any separate audit of the Fund and Program will be at the City's <br />cost and expense. Any separate audit of the Fund and Program will be at the City's cost and <br />expense. Any separate audit of the Fund and Program will be at City's cost. <br />6. Advisory Committee. The Executive Director of Santa Ana's Park's Recreation and <br />Community Services Agency will advise CVOC on the distribution for City parks related projects. If <br />no advisors are able and willing to act, CVOC shall make decisions without advisors. As required by <br />CVOC Fiscal Sponsorship Agreement 2 <br />