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<br />SECTION 17. SUSPENSION <br />Notwithstanding the provisions of Texas Civil Statutes, Article 601f, in the <br />event that Contractor fails to comply with any term of this contract, <br />Department may, upon written notification to Contractor, suspend this contract <br />in whole or in part and withhold further payments to Contractor, and prohibit <br />Contractor from incurring additional obligations of funds under this contract. <br />SECTION 18. TERMINATION <br />A. Department shall have the right to terminate this contract, in whole or in <br />part, at any time before the date of completion specified in Section 2 of this <br />contract whenever Department determines that Contractor has failed to comply <br />with any term of this contract. Department shall notify Contractor in writing <br />prior to the thirtieth (30th) day preceding the date of termination of such <br />determination; the reasons for such termination; the effective date of such <br />termination; and in the case of partial termination, the portion of the <br />contract to be terminated. <br />B. Either of the parties to this contract shall have the right to terminate <br />this contract, in whole or in part, when both parties agree that the <br />continuation of the activities funded under this contract would not produce <br />beneficial results commensurate with the further expenditure of funds; <br />provided that both parties agree, in writing, upon the termination conditions, <br />including the effective date of such termination; and in the case of partial <br />termination, the portion of the contract to be terminated. <br />C. Upon termination or receipt of notice to terminate, whichever occurs <br />first, Contractor shall cancel, withdraw, or otherwise terminate any <br />outstanding orders or subcontracts related to the performance of this contract <br />or the part of this contract to be terminated, and shall cease to incur costs <br />thereunder. Department shall not be liable to Contractor or to Contractor's <br />creditors for costs incurred after termination of this contract. <br />D. Notwithstanding any exercise by Department of its right of suspension <br />under Section 17 of this contract, or of early termination pursuant to this <br />Section 18, Contractor shall not be relieved of any liability to Department <br />for damages due to Department by virtue of any breach of this contract by <br />Contractor. Department may withhold payments to Contractor until such time as <br />the exact amount of damages due to Department from Contractor is agreed upon <br />or is otherwise determined. <br />SECTION 19. AUD IT <br />A. Unless otherswise directed by Department, Contractor shall arrange for the <br />performance of an annual financial and compliance audit of funds received and <br />performances rendered under this contract, subject to the following conditions <br />and limitations: <br /> Page 9 of 14 Pages <br />