55.  EXIT ARRANGEMENTS

55.1.  The Authority and the Service Provider shall comply with the exit arrangements set out in Schedule 18 (Exit Arrangements) and any current Exit Plan.  Notwithstanding any other provision of this Agreement the Authority shall have the rights set out in clause 55.2:

55.1.1.  if an [Insolvency Event] occurs, the Authority's rights under clause 55.2 shall be exercisable by the Authority at any time before the winding up of the Service Provider [or the Guarantor] or any other consequence of the occurrence of those events, including the appointment of a liquidator, receiver, manager or administrator;

55.1.2.  in the event of termination of this Agreement for any reason; and/or

55.1.3.  upon the expiry of this Agreement.

55.2.  The Service Provider shall not, without the Authority's consent, encumber any [Service Provider Equipment/Assets] in any way which would require the consent of a third party to the exercise by the Authority of its rights under Schedule 18 (Exit Arrangements) or which would in some other way restrict the exercise by the Authority of its rights under that schedule.  For the purposes of this clause 55.2 "encumber" [does not include any leasing agreement but] shall include any interest or equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, security interest, any other security agreement or arrangement [(except for a floating charge attaching generally to the assets and undertaking of the Service Provider which has not crystallised)] or which otherwise restricts the Service Provider's ability to use and deal with the relevant item of [Service Provider Equipment].

55.3.  Unless the Authority otherwise requires, during the time between service of a notice of termination of this Agreement in whole or in part and such termination taking effect, the Service Provider shall take all steps, which are necessary and consistent with its continuing obligations, to mitigate any losses, costs, liabilities and expenses which the Service Provider may incur as a result of the termination, including to:

55.3.1.  cancel all capital and recurring cost commitments in connection with the Transition Plan and/or the provision of the Services on the most cost-effective terms;

55.3.2.  terminate all relevant contracts or the relevant parts of relevant contracts with its Sub-Contractors in connection with the provision of Services on the most favourable terms as can be achieved in the particular circumstances, having first ascertained from the Authority whether such contracts are required to be transferred to the Authority or any Future Service Provider instead;

55.3.3.  reduce labour costs by the redeployment or release of Service Provider's personnel other than [Key Personnel] to the extent possible in the circumstances; and

55.3.4.  apply any insurance monies available to the reduction of any unavoidable costs remaining in respect of the required actions in clauses 55.3.1 to 55.3.3 (inclusive).

55.4.  [If the cost of any [Service Provider equipment] has not been fully paid for through the Payment or otherwise amortised at the time of expiry or termination of this Agreement, the Authority shall pay the Service Provider Net Book Value of any Service Provider equipment that the Authority elects to have transferred to it in accordance with Schedule 18 (Exit Arrangements.]  

55.5.  If the Service Provider does not fulfil its obligations in accordance with clause 55.3, the Authority shall not pay any sums in excess of those which the Authority would have paid had such action been taken.