SCHEDULE 14.2
THIS IS SCHEDULE 14.1 REFERRED TO IN THE FOREGOING
FRANCmSE
AGREEMENT
AMONG THE
STRATEGIC
RAIL
AUTHORITY, STRATBCL \'DE PASSENGER TRANSPORT. EXECUTIVE
AND FIRST SCOTRAIL LIMITED
Maintenance of Operating Assets
1.
(
OPERATINGAssETS
1.1
The Franchisee shall maintain, protect and preserve the assets (including any
intellectual property or intangible assets) employed in the performance of its
obligations under this Agreement (the Op~lYIfIng"'$Sen) in good standing or good
working order, subject to fair wear and tear.
1.2
The Franchisee shall carry out its obligations under paragraph 1.1 so that the
Operating Assets may be tnulSferred at the end of the Franchise Period to a Successor
Operator and used by such Successor Operator in the provision ~ operation of similar
services to the Franchise Services .•
1.3
Where any opemnng asset is lost, destroyed or otherwise beyond repair, the
FIaIlChisee shall replace the operating asset with property, rights or liabilities in
modem equivalent form to the operating asset to be replaced. Tbe Franchisee shall at
all times maintain an appropriate volume of Spares and/or an appropriate level of
access to Spares from a third party, to enable it to perform its obligations under this
Agreement
1.4
The Authority may at any time -require the Franchisee to provide to the
Authority a schedule specifying the condition of any asset or class of assets that it
specifies for this purpose. Such schedu1e shall cover such aspects of asset condition
as the Authority may reasonably require. If the Authority and the Franchisee are
unable to agree the content of such schedule of condition, either of them may refer the
dispute for resolution in accordance with the Dispute Resolution Rules. Until such
dispute is resolved, the Franchisee shaII comply with the Authority's requirements in
resp.ect of such schedule of condition.
1.5
The Franchisee shall keep vested in it at all times during the Franchise Period
all Franchise Assets designated as such pursuant to Schedule 14.4 (Designation of
Frll1lchise Assets) as it may require in Otder to comply with:
(a)
the Licences;
(b)ariy
contracts of employment with Franchise Employees;
(c)
an~ relevant Fares;
(d)
any Key Contracts; and
Pap 472 ofSs6
tPA
(e)
any applicable safety legislation regulations or safety standards and the Safety
Case,
in order to ensure that the Authority may designate such assets as Primary Franchise
Assets.
2.
BRAND LICENCES AND BRANDING
Brand Licences
2.1
The Franchisee shall comply with its obligations under each of the Brand
Licences.
Branding
2.2
Subject to paragraphs 2.5 and 2.6 in respect of the btanding of the SPTE Train
Fleet and to any applicable obligations or restrictions on the Franchisee (including the
tenns oftbe Rolling Stock Leases), the Franchisee:
(a)
(b)
may apply at Hs own cost registered or unregistered trade marks (including
company names, livery and other distinctive get-up) to:
(i)
any assets used by it predominantly in the operation and provision of
the SPTE Services with the consent of the SPTE (such consent not to
be unreasonably withheld); and
(ii)
any other assets owned or used by it in the operation and provision of
the Franchise Services; and
shall use all reasonable endeavours to apply at the Authority's cost such
registered or unregistered trade marks (including company names, livery and
other distinctive get-up) to any assets owned or used by it in the operation and
provision of the Authority Semces as the Authority may direct
2.3(a) Subject to paragraphs 2.3(c) and (g), the Franchisee may:
(b)
(i)
in respect of unregistered Maries, provide or procure the provision of
an irrevocable undertaking to any relevant Successor Operator to the
effect that neither it Dor the owner of the Marks will enforce such
rights as it may have or may in the future have in respect of such
Marks against such Successor Operator and its successors; and
(ii)
in respect of registered Maries. grant or procure the grant of an
irrevocable licence to use such Marks to such Successor Operator and
its successors. '
Any such licence or undertaking under paragraph 2.3(a) shall be in such
as the Authority sball reasonably require except that the tenns of any
licence and, to the extent appropriate, any such undertaking shall accord
the provisions of paragraphs S.1(aXi) to S.l(aXiv) of Schedule
(Provisions Applying on and after Termination).
Page 473 o!556
tPA
form
such
with
15.4
(c)
(
Subject to pamgraph 2.3(g), to the extent that:
(i)
the Franchisee does not provide a relevant undertaking or licence in
accordance with paragraph 2.3(a);
(ii)
the Authority considers the relevant Marks to be so distinctive or
otherwise such that. a Successor Operator could not reasonably be
asked to use the relevant assets to which the Marks are applied; or .
(Ui)
the Franchisee has not otherwise removed or covered such Marks in
such a way as may be reasonably acceptable to the Authority prior to
the expiry of the Franchise Period,
then the Franchisee shall pay to the relevant Successor Operator such amount
as may be agreed between the Ftancbisee and such Successor Operator, as
being the reasonable cost (including any Value Added Tax for which credit is
not available under Sections 2S and 26 of the Value Added Tax Act 1994) of
covering such Marks or otherwise· removing all indications of or reference to
the Marks in a manner reasonably acceptable to the Authority. Such amount
shall not in any event exceed the cost to the Successor Operator of replacing
such Marks with im own. If the Franchisee and the relevant Successor
Operator fail to agree such cost within 28 days of the expiry of the Franchise
Period, the Franchisee shall submit such dispute for resolution in accordance
with such dispute resolution procedures as the Authority may require.
(d)
The amount to be paid to a Successor Operator under paragraph 2.3(c) may
include the reasonable cost of:
(i)
removing or covering Marks from the exterior of any rolling stock
vehicle;
(ii)
removing or covering interior indications of the Marks including
upholstery and catpem;
(iii)
replacmg or covering all station or other signs including bill boards;
and
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(iv)
(e)
otherwise ensuring that such removal, covering or replacement is
effected with all reasOliable care and in such mariner that the relevant
.assets may reasonably continue to be used by a Successor Operator in
the provision of the Franchise Services.
The Franchisee shall. in addition to making a payment under paragraph 2.3(c).
grant or procure the grant of , licence or undertalcing complying with
paragraphs 2.3(a) and (b) except that such licence shan only be for such
period as may be agreed between the Franchisee and the Successor Operator
as being reasonably required by the Successor Operator to remove the Marks
ftom all relevant assets without causing excessive dismption to the operation
of seJ;Vices similar to the Franchise Services provided by such Successor
Operator. If such'period cannot be agreed, the Franchisee shall submit such
Page 474 of556
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dispute for resolution in accordance with such dispute resolution procedures
as the Authority may require.
(f)
The Authority shall determine at or around the end of the Franchise Period,
and after consultation with the Fnmcbisee and, where relevant, the SPTE, the
maximum liability of the Franchisee uuderparagraph 2..3(c) and the maximum
length oflicencc or undertaking under paragraph 2.3(e).
(g)
The provisions ofparagrapbs 2.3(a) to (t) shall not apply to the extent that the
relevant asset is not to be used by a Successor Operator in the provision of
services similar to the Franchise Services. The Authority shall notifY the
Franchisee as soon as it becomes aware of whether or not any such asset is to
be so uSed.
Non-deslgnatlon of New Brands
2.4
The Authority agrees not to designate as a Primary Franchise Asset any
registered or unregistered trade marie which is developed by the Franchisee.
Branding of SPTE Rolling Stock Vehldes
2.5
The Franchisee shall apply such registered or umegistered trademarks and
livery to such assets as it may use predominantly in the operation and provision of the
SPTE Services as the SPTE may reasonably direct (including any changes to such
trademarks or livery), provided that SPTB shall pay the Franchisee the reasonable
cosls of complying with any such direction.
2.6
The Franchisee shall use reasonable endeavours to apply such registered or
unregistered trademarks and livery to such structures Of fixtures at SPTE Stations as
the SPTE may reasonably direct (including any changes to such trademarks or livery),
provided that SPTE shall pay the Franchisee the reasonable costs of complying with
any such direction.
Use of Brands
2.7
The Franchisee autborises -the Authority, the SPTE artd the Scottish Ministers
fOT the dura.tion of the Franchise Term to use without charge any registered or
unregistered trade marks (including company names, livery and other distinctive getup) which the FI1II1Chiseeuses in the operation md provision of the Passenger
Services for the purpose of the Authority's, the SPTE's and/or the Scottish Ministers'
advertising, promotion and marketing of my of the Pas~enger S~ces.
General Advertising and Promotion
2.8
The Authority and the Scottish Ministers may each at their own cost advertise
and promote the Authority Services and/or the Passenger Services.
Pap 4750(556
IFA
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