The Transition Services Agreement (TSA) is essential in corporate transactions where immediate separation of all business functions is not feasible. Used predominantly in the United States, it provides a framework for continued operational support during the transition period following mergers, acquisitions, or divestitures. The agreement typically covers various services such as IT, HR, finance, and operations, specifying service levels, costs, duration, and exit criteria. TSAs are crucial for ensuring business continuity while the separated entity establishes its independent operations or integrates with its new parent company.
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1. Parties: Identification of service provider and recipient entities
2. Background: Context of the transition, usually following M&A or corporate restructuring
3. Definitions: Key terms used throughout the agreement including Services, Service Levels, Term, etc.
4. Services: Detailed description of transition services to be provided, including scope, standards and delivery requirements
5. Service Levels: Performance standards, metrics, and remedies for failure to meet agreed service levels
6. Term and Termination: Duration of services, extension options, and circumstances for early termination
7. Fees and Payment: Pricing structure, payment terms, invoicing procedures and late payment consequences
8. Intellectual Property: Rights and licenses to intellectual property used in providing services
9. Confidentiality: Protection of confidential information exchanged during the service period
10. Liability and Indemnification: Allocation of risks, limitation of liability, and indemnification obligations
11. Force Majeure: Circumstances excusing performance and related procedures
12. Governing Law: Applicable law and jurisdiction for dispute resolution
1. Migration Services: Details of knowledge transfer and system migration processes when complex technical transitions are involved
2. Employee Matters: Personnel arrangements and transfers when staff transitions are part of the agreement
3. Data Protection: Specific data handling requirements and compliance measures when personal or sensitive data is involved
4. Business Continuity: Disaster recovery and business continuity requirements for critical services
5. Third Party Contracts: Management of third-party contracts and licenses when relevant to service provision
1. Service Description Schedule: Detailed specifications of each service including scope, deliverables, and technical requirements
2. Service Level Agreement: Detailed performance metrics, measurement methods, and remedies for service level failures
3. Pricing Schedule: Detailed fee structure, calculations, and any volume-based pricing arrangements
4. Key Personnel Schedule: List of key staff involved in transition with roles and responsibilities
5. Migration Plan: Detailed timeline and steps for service transition and knowledge transfer
6. Data Processing Agreement: Specific terms for handling personal data and ensuring compliance with privacy laws
Relevant legal definitions
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