Below is a sample Transition Services Agreement (TSA) template, written in a formal legal style. This template is for illustration purposes, demonstrating typical structure and robust contractual language that might be found in a real TSA. It assumes a scenario where the Seller is providing certain transition services to the Buyer after a carve-out acquisition. (Note: In an actual transaction, the TSA would be customized to the specific deal and reviewed by legal counsel.)
THIS SAMPLE DOCUMENT IS INTENDED TO SERVE AS A STARTING POINT ONLY, AND SHOULD BE TAILORED TO MEET YOUR SPECIFIC REQUIREMENTS. THIS DOCUMENT SHOULD NOT BE CONSTRUED AS LEGAL ADVICE FOR ANY PARTICULAR FACTS OR CIRCUMSTANCES.
THIS TRANSITION SERVICES AGREEMENT (this “Agreement”) is made and entered into as of [Effective Date], by and between [SELLER NAME], a [State/Country] [corporation] (“Provider”), and [BUYER NAME], a [State/Country] [corporation] (“Recipient”). Provider and Recipient are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
WHEREAS, pursuant to that certain [Asset Purchase Agreement or Stock Purchase Agreement] dated [Date] between Provider, Recipient, and certain other parties (the “Purchase Agreement”), Recipient is acquiring from Provider certain assets and business operations related to Provider’s [Name of Business or Division] (the “Business”);
WHEREAS, prior to the closing of the transactions contemplated by the Purchase Agreement, the Business has been supported by certain centralized services and resources of Provider, and Recipient desires to receive, on a transitional basis, the continuation of such services following the closing; and
WHEREAS, Provider is willing to provide (or cause to be provided) to Recipient certain transition services for the benefit of the Business for a limited period after the closing, all on the terms and conditions set forth in this Agreement and for the fees herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Purchase Agreement, and intending to be legally bound, the Parties agree as follows:
1. Definitions.
Capitalized terms used but not defined in this Agreement have the meanings ascribed to them in the Purchase Agreement. In addition, the following terms have the meanings set forth below when used herein:
“Business Day” means any day other than a Saturday, Sunday or a day on which banks in New York, NY are authorized or required to be closed.
“Services” means the transition services to be provided by Provider as described in **Schedule A** attached hereto, as such schedule may be amended by the Parties in writing from time to time.
(Additional specific definitions may be inserted as needed, e.g., definitions for “Service Location,” “Third Party Provider,” etc.)
2. Services to be Provided.
During the term of this Agreement, Provider shall provide to Recipient (and to the Business) the Services described in Schedule A, subject to the terms and conditions of this Agreement. Provider shall provide the Services in substantially the same manner and at substantially the same level of quality and efficiency as such services were provided to the Business by Provider immediately prior to the closing of the transactions under the Purchase Agreement. Provider shall allocate sufficient resources and qualified personnel as are reasonably necessary to perform the Services. In providing the Services, Provider will use its existing systems, software, facilities, equipment, and personnel, except as may otherwise be agreed in writing by the Parties. Nothing in this Agreement will require Provider to hire additional employees or purchase new equipment in order to provide the Services, unless Recipient agrees to reimburse the cost thereof and the Parties amend this Agreement to that effect.
(a) Schedule A – Scope of Services: Schedule A (attached and incorporated herein) sets forth a detailed description of each Service, including (i) a summary of the tasks or functions included, (ii) the frequency or service levels (if applicable) at which the Service will be performed, (iii) the duration for which the Service will be provided (if other than the default term in Section 3), and (iv) the corresponding fee or charge for the Service as determined pursuant to Section 5. The Parties may, by mutual written agreement, modify Schedule A from time to time to add, remove, or amend any Service. Any added service may be subject to additional fees to be agreed. For any Service removed before the end of the term, the fees for that Service shall cease to accrue after the effective date of removal (except for any unavoidable wind-down costs which Recipient agrees to bear, if applicable).
(b) Standard of Performance: Provider shall use commercially reasonable efforts in performing the Services and shall exercise at least the same degree of care, skill, and diligence in performing the Services as it uses in performing similar services for its own operations. Provider makes no warranty or guarantee, express or implied, with respect to the Services, except that Provider shall perform the Services in good faith and in accordance with the requirements of this Agreement. EXCEPT AS EXPRESSLY SET FORTH HEREIN, PROVIDER DISCLAIMS ANY IMPLIED WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICES.
(c) Third-Party Service Providers: Recipient acknowledges that certain Services may be provided by Provider through third-party contractors or service providers that Provider uses in its own business (for example, cloud hosting services, software vendors, etc.). Provider shall be responsible for the performance of any such third-party subcontractors in providing the Services (provided that Provider will not be responsible for any failure attributable to third-party providers that Recipient has insisted upon or directed outside of Provider’s normal arrangements). Provider shall not subcontract or delegate performance of the Services to a third party (other than Provider’s Affiliates or existing outsourced service providers) without Recipient’s consent, not to be unreasonably withheld. If any consents from third-party vendors are required for Provider to provide a Service to Recipient, the Parties shall cooperate in good faith to obtain such consents. Any out-of-pocket fees charged by such third-party vendors to enable the provision of Services to Recipient (e.g., consent fees) shall be borne by Recipient as part of the Service costs.
3. Term and Termination.
(a) Term of Services: This Agreement shall become effective on the Closing Date under the Purchase Agreement (the “Effective Date”) and, unless earlier terminated as provided herein, shall continue in effect until the date that is [12] months after the Effective Date (the “Termination Date”). Specific Services may have shorter durations as set forth in Schedule A, and such Services will terminate on their specified end dates. The Parties may mutually agree in writing to extend the Termination Date or the duration of any individual Service. If Recipient desires an extension of any Service, it shall notify Provider at least [60] days prior to the scheduled end of such Service. Provider will consider any such request in good faith, but no extension shall be effective without written agreement on the extension and any applicable changes in fees (Provider may condition any extension on an increase of fees of up to [__]% for the extended period, unless otherwise agreed).
(b) Termination for Convenience (by Recipient): Recipient may terminate this Agreement in its entirety, or discontinue any individual Service, for any reason by providing at least [30] days’ prior written notice to Provider. In the event of any such early termination, Recipient shall be responsible for paying Provider for Services performed up to the effective termination date. If Recipient terminates an individual Service, the Parties will update Schedule A to reflect the removal of that Service; the Agreement will continue for the remaining Services. Any notice of partial termination shall specify which Services are being discontinued.
(c) Termination for Cause: If either Party (the “Breaching Party”) materially breaches any of its obligations under this Agreement, the other Party may give written notice to the Breaching Party describing the breach in reasonable detail. The Breaching Party shall have [30] days (or [10] days in the case of a payment default) from receipt of such notice to cure the breach to the reasonable satisfaction of the non-Breaching Party. If the Breaching Party fails to cure the breach within the cure period, the non-Breaching Party may terminate this Agreement (in whole or in part, as appropriate) by providing written notice of termination to the Breaching Party, effective immediately or as of a date specified. For the avoidance of doubt, Provider’s failure to perform any Service in a manner consistent with Section 2(b) that materially impairs the Business and remains uncured shall be considered a material breach by Provider. Likewise, Recipient’s failure to pay any undisputed amounts when due that is not cured within the [10]-day period shall be a material breach by Recipient.
(d) Insolvency: Either Party may terminate this Agreement immediately upon written notice if the other Party (i) becomes insolvent or is unable to pay its debts as they become due, (ii) is the subject of a voluntary or involuntary bankruptcy, receivership or similar proceeding that is not dismissed within 60 days, or (iii) makes an assignment for the benefit of creditors. In any such event, Provider and Recipient will cooperate to arrange an orderly cessation of Services, to the extent possible.
(e) Effect of Termination: Upon termination or expiration of this Agreement (or any individual Service), Provider shall cease providing the terminated Services. Recipient shall promptly pay all outstanding invoices for Services provided up to the termination date. In addition, if this Agreement or a particular Service is terminated prior to the agreed Termination Date (other than due to Provider’s material breach or insolvency), Recipient shall reimburse Provider for any actual costs or penalties that Provider incurs as a direct result of such early termination (for example, cancellation fees to third-party service providers), provided that Provider documents such costs and such costs were unavoidable and directly caused by the early termination. Provider shall use commercially reasonable efforts to mitigate any such costs. Termination of this Agreement shall not affect the provisions that are expressly or by implication intended to survive, including provisions regarding payment of outstanding amounts, confidentiality, liability, and dispute resolution.
(f) Transition Assistance: In the event of any expiration or termination of this Agreement (in whole or in part), Provider shall provide reasonable cooperation and support to Recipient for a period of up to [30] days after termination to transition the Services to Recipient or its designee, at Recipient’s request. Such assistance may include providing relevant documentation, data transfers, and communications with third-party providers. If termination is due to Provider’s breach, such transition assistance shall be at Provider’s cost; otherwise, Recipient shall pay Provider for any transition assistance at Provider’s standard hourly rates (or as otherwise agreed).
4. Recipient’s Obligations.
Recipient shall cooperate with Provider as reasonably necessary for the provision of the Services. In particular, Recipient shall: (a) provide in a timely manner any information or materials in its possession that Provider reasonably requests to carry out the Services; (b) provide Provider’s personnel with reasonable access (including remote electronic access, where applicable) to Recipient’s facilities, systems, and premises as needed for Service delivery (subject to Recipient’s normal security and safety policies, which shall be provided to Provider); (c) take no action (and cause its Affiliates to refrain from actions) that unreasonably interfere with Provider’s provision of Services; and (d) designate and make available appropriate Recipient personnel to act as liaisons with Provider for each category of Services (as identified in Schedule A) to facilitate communications. Recipient is responsible for obtaining any third-party consents or licenses that are required for Provider to access any of Recipient’s own systems or data in the course of providing Services. If Recipient fails to perform any of its obligations under this Section 4 and such failure impacts Provider’s ability to deliver a Service, Provider’s obligations to that extent shall be suspended until Recipient has remedied its failure; in such event Provider will use reasonable efforts to notify Recipient of the issue. Recipient shall use commercially reasonable efforts to assume internal responsibility for each Service or migrate to its own systems as soon as practicable within the term of this Agreement.
5. Fees; Payment.
In consideration for the Services, Recipient shall pay to Provider the fees, charges, and costs set forth in Schedule A (the “Service Charges”). Unless otherwise stated in Schedule A: (a) recurring Services (e.g. monthly support services) shall be charged on a pro-rata basis for any partial months; (b) any out-of-pocket costs and expenses incurred by Provider in performing the Services (such as fees to third-party vendors, travel costs if pre-approved by Recipient, etc.) shall be reimbursed by Recipient at actual cost; and (c) all fees and costs are denominated in [U.S. Dollars] and payable in that currency. Provider shall invoice Recipient monthly (unless another frequency is specified in Schedule A) for the Service Charges incurred in the preceding period. Provider will provide reasonable documentation or breakdown of charges with each invoice (including any third-party pass-through costs). Recipient shall pay each undisputed invoice within [30] days of receipt via wire transfer or other mutually agreed method. If Recipient in good faith disputes any portion of an invoice, it shall notify Provider of the dispute and the basis within 15 days of invoice receipt, and the Parties will promptly negotiate in good faith to resolve the dispute. Recipient may withhold payment of the disputed portion until resolution, but will pay the undisputed portion. Late payments of undisputed amounts shall bear interest at the rate of [1.0]% per month (or the highest rate allowed by law, if lower), calculated from the date due until paid.
All compensation stated is exclusive of any sales, use, value-added, or similar taxes. If any such taxes are applicable to the Services, Recipient shall be responsible for paying them (except taxes on Provider’s income, which are Provider’s responsibility). The Parties agree to cooperate with each other to minimize any taxes associated with this Agreement, including by providing resale or exemption certificates if appropriate. Each Party shall bear its own income tax liabilities arising from payments under this Agreement.
Except for the fees and costs described in this Section, Recipient shall not be obligated to pay any other amount for the Services, and Provider shall be solely responsible for any costs it incurs that are not expressly chargeable to Recipient. Provider acknowledges that, except as otherwise expressly provided in Schedule A, the Service Charges are intended to cover Provider’s costs of providing the Services without profit or markup.
6. Intellectual Property and Data.
All right, title, and interest in and to each Party’s intellectual property (including but not limited to patents, trademarks, copyrights, trade secrets, software, and know-how) is and shall remain the property of that respective Party or its licensors. Nothing in this Agreement transfers ownership of any intellectual property. Provider acknowledges that any intellectual property sold or licensed to Recipient under the Purchase Agreement remains Recipient’s property, and Provider’s use of it is only to provide Services during the Term.
Provider hereby grants to Recipient and its Affiliates a non-exclusive, royalty-free, worldwide right and license during the Term to use Provider’s intellectual property, but solely to the extent necessary for Recipient to receive and benefit from the Services. This license may include, for example, the right for Recipient to access and use Provider’s software applications or tools listed in Schedule A as part of the Services, for the benefit of the Business. Recipient shall use any such Provider IP only in accordance with Provider’s usage instructions and solely for purposes of the Services. Except as expressly permitted, Recipient shall not copy, modify, reverse-engineer, or sub-license Provider’s software or systems.
Conversely, to the extent any Service involves Provider’s use of intellectual property or systems that were transferred to Recipient at closing (including any Business data or IT systems acquired by Recipient), Recipient grants Provider a limited license during the Term to use such IP and systems solely as needed to perform the Services for Recipient. For example, if certain IT systems of the Business are now owned by Recipient but Provider’s personnel need access to operate them for transition, Recipient will permit such access under Recipient’s supervision.
Data Ownership: Any data related to the Business that is processed or generated in the course of providing Services shall be the property of Recipient (or its relevant Affiliate), and Provider shall have no rights to such data other than to use it for purposes of performing the Services. Provider shall deliver or return any requested Business data to Recipient promptly upon request or upon termination of the applicable Service, in the format reasonably specified by Recipient. Provider may retain copies of data only to the extent required by law or archival backups, subject to confidentiality obligations.
Data Protection: Each Party shall comply with all applicable data protection and privacy laws with respect to personal data processed in connection with this Agreement. Without limiting the generality of the foregoing, Provider shall: (i) process any personal information of Recipient’s employees, customers, or other individuals (“Recipient Personal Data”) solely on behalf of Recipient and in accordance with Recipient’s instructions (which are to provide the Services under this Agreement); (ii) implement and maintain appropriate technical and organizational security measures to protect Recipient Personal Data against unauthorized access, loss, or misuse; (iii) promptly notify Recipient of any actual or suspected unauthorized access to or disclosure of Recipient Personal Data; and (iv) upon Recipient’s request or upon termination, return or securely destroy all Recipient Personal Data in Provider’s possession, except as otherwise required by law. The Parties shall work together in good faith to enter into any additional data processing agreements or clauses that may be required by certain jurisdictions’ laws (for example, standard contractual clauses for cross-border transfers, if applicable).
7. Confidentiality.
Each Party (in this context, the “Receiving Party”) shall, and shall cause its directors, officers, employees, contractors, and advisors to, hold in strict confidence all Confidential Information of the other Party (the “Disclosing Party”) that is disclosed or made available in connection with this Agreement. “Confidential Information” means all non-public information regarding the Disclosing Party’s business, operations, systems, finances, customers, or other affairs, whether disclosed before or after the Effective Date, and includes the terms of this Agreement. Each Party will use the same degree of care (and no less than a reasonable standard of care) to protect the Confidential Information of the other as it uses to protect its own confidential information of similar nature. Confidential Information shall be used by the Receiving Party solely for the purpose of fulfilling its obligations or exercising its rights under this Agreement, and shall not be used or disclosed for any other purpose without the Disclosing Party’s prior written consent.
The obligations in this Section 7 do not apply to information that the Receiving Party can prove: (a) is or becomes generally available to the public through no breach of this Agreement; (b) was known to the Receiving Party prior to disclosure by the Disclosing Party, free of any confidentiality obligation; (c) is received from a third party lawfully possessing and lawfully entitled to disclose it, without confidentiality restrictions; or (d) is independently developed by the Receiving Party without use of or reference to the Disclosing Party’s Confidential Information. In addition, the Receiving Party may disclose Confidential Information if and to the extent required by law, regulation, or legal process (including court order or government demand), provided that, unless prohibited by law, the Receiving Party gives the Disclosing Party prompt notice of the requirement so the Disclosing Party may seek a protective order or other appropriate remedy. The Receiving Party shall in any event disclose only that portion of Confidential Information which it is legally required to disclose and shall use reasonable efforts to ensure confidential treatment for any Confidential Information so disclosed.
All Confidential Information remains the property of the Disclosing Party. This confidentiality clause shall survive any termination or expiration of this Agreement for a period of [____] years (and indefinitely as to any trade secrets). Each Party acknowledges that breach of this Section could cause irreparable harm not adequately compensable by monetary damages, and that the Disclosing Party shall be entitled to seek injunctive relief to enforce these obligations, without prejudice to any other rights or remedies.
8. Indemnification.
Each Party shall indemnify, defend, and hold harmless the other Party and its Affiliates, and their respective officers, directors, and employees (collectively “Indemnified Parties”) from and against any and all losses, damages, liabilities, judgments, settlements, fines, costs, and expenses (including reasonable attorneys’ fees) (“Losses”) arising out of or resulting from any third-party claim, demand, lawsuit, or proceeding (a “Claim”) to the extent such Claim is caused by:
– (a) in the case of Provider as indemnitor: (i) the gross negligence or willful misconduct of Provider or its personnel in performing the Services, (ii) Provider’s material breach of this Agreement, or (iii) any actual infringement of a third party’s intellectual property rights by Provider’s proprietary tools or systems used in providing the Services (but excluding any infringement that results from Recipient’s specific requirements or from any Recipient intellectual property or third-party products); and
– (b) in the case of Recipient as indemnitor: (i) the negligence or willful misconduct of Recipient or its personnel in connection with its use of the Services, (ii) Recipient’s material breach of this Agreement, or (iii) any Claim by third parties (including employees or customers of the Business) arising from Recipient’s operation of the Business (except to the extent caused by Provider’s breach or negligence in performing the Services).
The foregoing indemnities are subject to the following conditions: the Indemnified Party shall give prompt written notice of the Claim (failure to give timely notice relieves the indemnitor only to the extent it was prejudiced by the delay); the indemnitor shall have the right to control the defense and settlement of the Claim, with counsel of its choosing (provided that any settlement involving non-monetary relief or any admission of fault by the Indemnified Party requires the Indemnified Party’s consent, not to be unreasonably withheld); and the Indemnified Party shall provide reasonable cooperation at the indemnitor’s expense. The Indemnified Party may participate with its own counsel at its own expense. The indemnitor shall not be liable for any settlement or compromise made without its consent.
This Section 8 sets forth each Party’s sole and exclusive remedy for the Claims described herein, except to the extent that an Indemnified Party has available insurance coverage or rights under other agreements (in which case, these indemnity obligations are in addition to, and not in lieu of, any such coverage or rights).
9. Limitation of Liability.
EXCEPT FOR (i) EACH PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 8, (ii) EITHER PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 7, OR (iii) FRAUD OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES, OR ANY LOSS OF PROFITS, LOSS OF REVENUE, LOSS OF GOODWILL, OR BUSINESS INTERRUPTION, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROVISION OR USE OF SERVICES, WHETHER IN CONTRACT, TORT, OR UNDER ANY OTHER THEORY, AND REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE or whether the damaged party has been advised of the possibility of such damages.
Except for the exceptions noted in the preceding sentence, the aggregate liability of each Party and its Affiliates to the other Party for any and all claims and Losses arising under or in connection with this Agreement shall not exceed [$X] (the “Liability Cap”). The Parties agree that the Liability Cap (and other limitations in this Section 9) have been negotiated and reflect a fair allocation of risk. Furthermore, Provider’s liability for any failure or delay in performing a particular Service shall not exceed the portion of the fees specifically allocable to that Service.
Notwithstanding the foregoing, nothing in this Agreement shall limit or exclude any liability to the extent such limitation or exclusion is prohibited by applicable law.
10. Miscellaneous.
(a) Governing Law; Dispute Resolution: This Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflict of laws principles. Any disputes arising out of or relating to this Agreement that cannot be resolved amicably by the Parties’ project managers or through escalation to senior executives shall be resolved in the manner set forth in Section [__] of the Purchase Agreement (which provisions are incorporated herein by reference), including [specify if arbitration, court jurisdiction, etc., as per the Purchase Agreement]. Notwithstanding any pendency of a dispute, the Parties shall continue to perform their respective obligations under this Agreement to the extent practicable (and Provider shall not discontinue or suspend any Service except as permitted under this Agreement).
(b) Notices: All notices or other communications required or permitted under this Agreement shall be in writing and shall be deemed given: (i) when delivered personally or by email (with confirmation of transmission) to the addresses below, or (ii) on the third business day after being mailed by registered or certified airmail (return receipt requested), or (iii) on the next business day after being sent by internationally recognized overnight courier. Notices shall be addressed as follows (or to such other address as a Party may designate by notice):
If to Provider: [Name, Title, Company, Address, Email]
If to Recipient: [Name, Title, Company, Address, Email]
(c) Entire Agreement; Amendments: This Agreement (including its Schedules and the Purchase Agreement references) constitutes the entire agreement between the Parties with respect to the subject matter of transition services and supersedes all prior discussions, negotiations, and agreements (written or oral) relating thereto. For clarity, this Agreement is entered pursuant to the Purchase Agreement, but stands as an independent agreement governing the provision of Services. In the event of any conflict between the terms of this Agreement and the Purchase Agreement regarding the Parties’ rights and obligations for transition services, the terms of this Agreement shall govern (except as otherwise explicitly stated herein). This Agreement may not be amended or modified except by an instrument in writing signed by both Parties.
(d) Assignment: Neither Party may assign or transfer (whether by operation of law, change of control, or otherwise) this Agreement or any of its rights or obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, either Party may assign this Agreement, in whole or in part, to an Affiliate or to a successor entity in the event of a merger or sale of substantially all its assets or business, provided that the assigning Party provides prior written notice to the other and the assignee agrees in writing to be bound by all terms of this Agreement. Any attempted assignment in violation of this Section 10(d) shall be null and void. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
(e) Relationship of Parties: The Parties are independent contractors, and nothing in this Agreement shall be deemed to create a partnership, joint venture, agency, or fiduciary relationship between the Parties. Provider personnel performing the Services shall remain under the direction and control of Provider (or its Affiliates or subcontractors, as applicable) and shall not be deemed to be employees or agents of Recipient. Provider shall be solely responsible for payment of all compensation, benefits, and employment taxes of its own personnel.
(f) No Third-Party Beneficiaries: This Agreement is for the sole benefit of the Parties and their permitted assigns, and nothing herein is intended to confer any rights or remedies on any other person or entity. Without limiting the generality of the foregoing, no customer, employee, or creditor of either Party shall have any rights under this Agreement by virtue of this Agreement or the provision of Services.
(g) Force Majeure: If either Party is prevented from or delayed in performing any of its obligations (other than payment obligations) under this Agreement due to any cause beyond its reasonable control, including acts of God, war, terrorism, civil unrest, embargo, fire, flood, epidemic, labor strike (excluding strikes of the Party’s own employees), or governmental action (each, a “Force Majeure Event”), such performance shall be excused for the period of delay caused by the Force Majeure Event. The Party affected by a Force Majeure Event shall promptly notify the other Party of the event, describing its impact on performance and the expected duration of the delay. The affected Party shall use diligent efforts to mitigate the effects of the Force Majeure Event and resume full performance as soon as practicable. In the event a Force Majeure Event prevents Provider from providing a Service, Recipient shall not be obligated to pay for that Service for the duration of the interruption (or shall receive an appropriate credit), and Recipient may procure such Service from an alternate source. If a Force Majeure Event endures for more than [60] days, either Party may terminate the affected Service by written notice to the other without penalty.
(h) Severability: If any provision of this Agreement is held by a court or other tribunal of competent jurisdiction to be invalid, illegal, or unenforceable, that provision shall be enforced to the maximum extent permissible and the remaining provisions of this Agreement will remain in full force and effect. The Parties shall negotiate in good faith a valid, legal, and enforceable substitute provision that most nearly effects the Parties’ intent in entering into this Agreement.
(i) Waiver: No failure or delay by either Party in exercising any right or remedy under this Agreement shall operate as a waiver of such right or remedy. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by an authorized representative of the waiving Party. A waiver on one occasion shall not be construed as a waiver of any future breach or default.
(j) Headings and Counterparts: Section headings are for convenience only and shall not affect the interpretation of this Agreement. This Agreement may be executed in counterparts (including by PDF or electronic signature), each of which shall be deemed an original and all of which together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have caused this Transition Services Agreement to be executed by their duly authorized representatives as of the date first written above.
[Seller Company Name] [Buyer Company Name]
By:__________________________ By:__________________________
Name:_______________________ Name:_______________________
Title:_________________________ Title:_________________________
Date:_________________________ Date:_________________________
Schedule A – Description of Transition Services and Fees
_(The Schedule below provides an illustrative format; the actual content will list each service.)_
Service Category | Description of Services | Service Duration | Service Fee/Charge | Provider Contact / Recipient Contact
- IT Services | e.g., Email and Network Access – Provider will continue to provide email hosting for Business’s existing email accounts (@provider.com) and network access for Business systems. Includes helpdesk support (up to X tickets per week) and maintenance of existing infrastructure. | 6 months from Closing | $[__] per user per month for email; $[__] flat per month for network & helpdesk. | Provider: IT Manager (Name, email); Recipient: CTO (Name, email)
- Finance & Accounting | e.g., Accounts Payable/Receivable – Provider’s finance team will process AP invoices and AR receipts for the Business using existing systems. Provider will also provide monthly financial reports to Recipient’s finance lead. | Up to 4 months (may be terminated earlier by Recipient with notice) | Actual cost of personnel time, estimated at $[__]/month, plus any third-party software fees at cost. | Provider: Controller (Name); Recipient: Finance Director (Name)
- Human Resources | e.g., Payroll and Benefits Administration – Provider will administer payroll for transferring Business employees on Recipient’s behalf, using Provider’s payroll system. Provider will also continue existing employee benefit programs for Business employees until [Date]. | 3 months for payroll (or until Recipient sets up its payroll, if earlier); benefits administration up to plan year end 12/31/202X. | $[__] per pay period processing fee; benefits costs passed through at cost. | Provider: HR Manager (Name); Recipient: HR Lead (Name)
- [Additional Services] | … (Each service line would be detailed in a similar fashion.) | | |
(End of Schedule A)
The above template demonstrates a comprehensive TSA structure, including recitals, core operative clauses (services, term, standards, fees, etc.), and boilerplate terms. In practice, parties would tailor each section to their needs – for instance, adjusting notice periods, fee structures, or adding any unique provisions (such as a special license agreement for shared software, or country-specific terms for international services). Nonetheless, this template provides a robust starting point reflecting how a real Transition Services Agreement may be written.
