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resulting from activities of CITY, its officers, agents, volunteers and <br />employees. CITY shall assume liability for all and any direct expense <br />incurred in providing services pursuant to this Agreement and shall assume any <br />and all responsibilities for loss or damage resulting from negligence, injury, <br />illness or disease arising out of the provision of services. CITY, however, <br />is obligated to promptly notify COUNTY in writing of the occurrence of any <br />such loss or damage. <br />CITY shall indemnify and hold harmless COUNTY against any liability, claims, <br />losses, demands, and actions incurred by COUNTY as a result of a determination <br />by HUD or its successor or any other applicable agency of the Federal <br />government that activities undertaken by or under the direction and control of <br />CITY or undertaken by COUNTY pursuant to CITY's request or on behalf of CITY <br />under the CDBG program fail to comply with any laws, regulations or policies <br />applicable thereto or that any funds billed by and disbursed to CITY under <br />this Agreement were improperly expended. <br />COUNTY shall, at its own cost and expense, defend, indemnify, and hold CITY, <br />its officers, agents, volunteers and employees, harmless from and against any <br />loss, liability, claim, or damage that may arise or result from any wrongful <br />act or wrongful omission by COUNTY, its officers,agents and employees. <br />8. DISPOSITION OF 'FUNDS <br />Unless prohibited by Federal Regulations, COUNTY and CITY agree that, to the <br />extent possible, CDBG funds will be allocated by COUNTY to CITY according to <br />its proportional demographics, for activities and/or projects prioritized by <br />CITY to alleviate its identified community development needs eligible under <br />the ACT. COUNTY, - by its Board of Supervisors, shall be responsible for <br />determining the final disposition and distribution of all funds received by <br />COUNTY under the ACT,, ! and for selecting the projects for which such funds <br />shall be used. Both parties agree that COUNTY has the authorization to <br />redistribute such funds when said projects are not implemented in a timely <br />manner as defined!by HUD. <br />9. DISPOSITION OF PROGRAM INCOME <br />CITY shall inform COUNTY regarding any income generated by the expenditure of <br />CDBG funds received by CITY. All said income shall promptly be paid to COUNTY <br />or retained by CITY subject to authorization by COUNTY for CITY use of said <br />income for eligible activities in accordance with all CDBG requirements as may <br />then apply. COUNTY shall be responsible for monitoring and reporting to HUD <br />on the use of any such program income thereby requiring appropriate record <br />keeping and reporting by CITY as may be needed for this purpose. In the event <br />of CDBG close-out or change in status of CITY under the CDBG program, any <br />program income that is on hand or received subsequent to the close-out or <br />change in status shall be paid to COUNTY. Any income generated from the <br />disposition or transfer or realpropertyprior to any such close out or change <br />of status shall be treated the same as program income. Any income generated <br />from the disposition or transfer of real property subsequent to any such <br />close-out or change of status, shall promptly be paid to COUNTY. <br />3 <br />