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The Grantee shall, at its expense, defend the State against all claims asserted by any person that <br /> anything provided by Grantee infringes a patent, copyright, trade secret or other intellectual property <br /> right and shall,without limitation,pay the costs,damages and attorneys' fees awarded against the State <br /> in any such action,or pay any settlement of such action or claim. Each party agrees to notify the other <br /> promptly of any matters to which this provision may apply and to cooperate with each other in <br /> connection with such defense or settlement. <br /> B. Governmental Entities In the event that the Grantee is a Governmental Entity, it will indemnify and <br /> hold harmless the Department as set out herein to the extent authorized by Federal and/or State <br /> constitutions(s)and/or laws. <br /> 5.7 MODIFICATION BY OPERATION OF LAW; BUDGET MODIFICATIONS; DISCRETIONARY <br /> MODIFICATIONS <br /> A. Modifications by Operation of Law This Agreement is subject to such modifications as the Department <br /> determines may be required by changes in Federal or State law or regulations applicable to this <br /> Agreement. Any such required modification shall be incorporated into and become part of this <br /> Agreement as if fully set forth herein. The Department shall timely notify the Grantee of any pending <br /> implementation of or proposed amendment to such regulations of which it has notice. <br /> B. Budget Modifications Grantee must expend the Grant Funds in accordance with the approved budget <br /> set forth in Part I hereof If the Grantee determines that its expenditures for the grant term will vary <br /> from the amounts listed in the approved project budget it must submit a written request for approval <br /> from the Department prior to incurring the revised costs. Said request must give the reasons for and <br /> amounts of the revisions. If the Department approves the revised expenditures, it will provide the <br /> Grantee with a revised Project Budget incorporating the revisions. Grantee's failure to obtain written <br /> approval for anticipated budget revisions is a sufficient reason for the Department to disallow any costs <br /> not included in the original project budget and require a refund from the Grantee. <br /> The Grantee may make a line item transfer up to the allowable variance percentage/amount of the total <br /> approved line item budget as specified in Budget (Part I) without prior written approval of the <br /> Department,subject to the following conditions: <br /> (1) Modifications Requiring Departmental Approval If the Grantee determines that its expenditures <br /> will vary from the approved budgeted line item amounts listed in Budget(Part I)by more than <br /> the allowable variance percentage/amount for any given line item expenditure, but will not <br /> exceed the total grant award,it shall submit a written request for approval from the Department <br /> prior to incurring the revised costs. Modification requests shall give the reasons for and amounts <br /> of the revisions. If the Department approves the revised expenditures, it will provide the <br /> Grantee with a revised project Budget (Part I)incorporating the revisions. Grantee's failure to <br /> obtain written approval for anticipated budget revisions shall be deemed sufficient for the <br /> Department to disallow any costs not included in the original project budget and require a refund <br /> from the Grantee. <br /> (2) Discretionary Transfers Transfers between approved line items that do not exceed the allowable <br /> variance percentage/amount of the original approved budget line item may be made at the <br /> Grantee's discretion without the Department's approval. For purposes of the allowable <br /> discretionary transfer(s),the line item to which the transfer is made cannot be increased by more <br /> than the allowable variance percentage/amount of the original approved line item. Additionally, <br /> the allowable discretionary transfer does not apply to an Audit Iine item(if present). Any and all <br /> modifications to an existing Audit line item may only be made with the Department's prior <br /> written approval. <br /> C. Discretionary Modifications If either the Department or the Grantee wishes to modify the terms of this <br /> Agreement other than as set forth in Sections 5.7(A)and 5.7(B) above,written notice of the proposed <br /> Page 21 Grant Number 15-203002 <br />