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If funding for any fiscal year is reduced or deleted by the budget act for purposes of this <br />program, the STATE shall have the option to either cancel this contract with no liability <br />occurring to the STATE, or offer a CONTRACT amendment to GRANTEE to reflect the <br />reduced grant amount. This Paragraph shall not require the mutual agreement as <br />addressed in Paragraph E, provision 2, of this CONTRACT. <br />G. Hold Harmless <br />The GRANTEE shall waive all claims and recourse against the STATE including <br />the right to contribution for loss or damage to persons or property arising from, <br />growing out of or in any way connected with or incident to this CONTRACT except <br />claims arising from the concurrent or sole negligence of the STATE, its officers, <br />agents, and employees. <br />The GRANTEE shall indemnify, hold harmless and defend the STATE, its officers, <br />agents and employees against any and all claims, demands, damages, costs, <br />expenses or liability costs arising out of the ACQUISITION, DEVELOPMENT, <br />construction, operation or maintenance of the property described as the project <br />which claims, demands or causes of action arise under California Government <br />Code Section 895.2 or otherwise except for liability arising out of the concurrent or <br />sole negligence of the STATE, its officers, agents, or employees. <br />3. The GRANTEE agrees that in the event the STATE is named as codefendant <br />under the provisions of California Government Code Section 895 et seq., the <br />GRANTEE shall notify the STATE of such fact and shall represent the STATE in <br />the legal action unless the STATE undertakes to represent itself as codefendant in <br />such legal action in which event the GRANTEE agrees to pay the STATE's <br />litigation costs, expenses, and reasonable attorney fees. <br />4. The GRANTEE and the STATE agree that in the event of judgment entered against <br />the STATE and the GRANTEE because of the concurrent negligence of the STATE <br />and the GRANTEE, their officers, agents, or employees, an apportionment of <br />liability to pay such judgment shall be made by a court of competent jurisdiction. <br />Neither party shall request a jury apportionment. <br />5. The GRANTEE shall indemnify, hold harmless and defend the STATE, its officers <br />agents and employees against any and all claims, demands, costs, expenses or <br />liability costs arising out of legal actions pursuant to items to which the GRANTEE <br />has certified. The GRANTEE acknowledges that it is solely responsible for <br />compliance with items to which it has certified. <br />H. Financial Records <br />1. The GRANTEE shall maintain satisfactory financial accounts, documents, including <br />loan documents, and all other records for the project and to make them available to <br />the STATE for auditing at reasonable times. The GRANTEE also agrees to retain <br />such financial accounts, documents and records for five years following project <br />12 <br />