The Transition Services Agreement (TSA) is essential in corporate transactions under English and Welsh law, particularly in mergers, acquisitions, and divestitures. It ensures business continuity by establishing a framework for the temporary provision of critical services from one party (typically the seller) to another (usually the buyer). The agreement covers essential aspects such as service definitions, performance standards, pricing, governance, and exit strategies. TSAs are particularly crucial when the acquiring entity needs time to establish its own operational capabilities or secure alternative service providers. The document must comply with UK regulatory requirements and often includes provisions for data protection, employment matters, and intellectual property rights.
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1. Parties: Identification and details of the service provider and recipient
2. Background/Recitals: Context of the agreement, typically referencing the main transaction necessitating the TSA
3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation
4. Services: Description of transition services to be provided
5. Term and Termination: Duration of the agreement and termination provisions
6. Service Levels: Performance standards and metrics
7. Charges and Payment: Pricing, payment terms, and invoicing procedures
8. Governance and Escalation: Management structure and issue resolution process
9. Confidentiality: Protection of confidential information
10. Liability and Indemnities: Risk allocation between parties
1. Data Protection: Required if personal data is processed as part of the services
2. Employee Matters: Staff transfer provisions when services involve secondment or transfer of employees
3. Intellectual Property Rights: IP ownership and licensing provisions when services involve creation or use of IP
4. Business Continuity: Disaster recovery provisions for critical services or regulated industries
5. Security Requirements: IT and physical security measures when services involve sensitive systems or facilities
1. Schedule 1 - Services Description: Detailed description of each service to be provided
2. Schedule 2 - Service Levels and KPIs: Detailed performance metrics and measurement methods
3. Schedule 3 - Charges: Detailed pricing structure and calculation methodology
4. Schedule 4 - Governance Procedures: Detailed management and reporting procedures
5. Schedule 5 - Exit Plan: Process for service transition at termination
6. Schedule 6 - Data Processing Agreement: Required GDPR compliant data processing terms
7. Schedule 7 - Business Continuity Plan: Detailed disaster recovery procedures
8. Schedule 8 - Contact Details: Key personnel and escalation contacts
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