A transition service agreement (TSA) is a contractual agreement between two companies that outlines the services and support that the seller company will provide to the buyer during the transition period after a sale or acquisition of a business. A TSA ensures a smooth transition of assets, operations, and processes from the seller to the buyer. Here`s a sample TSA and tips for drafting one.
Sample TSA:
1. Scope of Services: The seller shall provide the following services to the buyer during the transition period:
a) Provision of IT infrastructure, including hardware, software, and network services.
b) Access to financial records, databases, and other confidential information related to the sold business.
c) Assistance in training the buyer`s staff on processes and procedures related to the sold business.
d) Maintenance of customer relationships and continued delivery of products or services.
e) Transfer of contracts, licenses, permits, and other legal documents related to the sold business.
2. Duration of Services: The transition period shall begin on the effective date of the sale or acquisition and continue until the buyer can independently operate the sold business, but not exceeding 180 days.
3. Fees and Payment Terms: The buyer shall pay the seller for the provision of transition services based on the time and resources required to complete each service. Payment shall be made within 30 days of receiving the invoice.
4. Termination: Either party may terminate this agreement if the other party breaches any of its obligations. The terminating party shall give the other party written notice of the breach and a reasonable time to cure the breach.
Tips for drafting a TSA:
1. Define the scope of services: A TSA should clearly define the services that the seller will provide to the buyer. It should cover all the essential services required for the transition, such as IT infrastructure, customer support, and data transfer.
2. Specify the duration of services: The duration of the TSA should be clearly defined, including the specific start and end dates. This ensures that both parties have a clear understanding of the transition period.
3. Determine the fees and payment terms: The TSA should specify the payment terms for the transition services, including the amount and mode of payment, as well as the billing cycle. Make sure to consider the time and resources required for each service and set a fair fee for the seller.
4. Include a termination clause: A termination clause should be included in the TSA to allow either party to terminate the agreement if the other party breaches any of its obligations. This ensures that both parties are committed to fulfilling their obligations.
In conclusion, a TSA is an essential agreement that helps facilitate a smooth transition of assets, processes, and operations from the seller to the buyer. Including the above elements in the TSA can help ensure a successful transition process. As a professional, incorporating relevant keywords and meta descriptions can help increase visibility and search engine rankings for this article.