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Transition Services Agreement

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TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (this Agreement) is made as of by and between Seller Name: with principal place of business at , and Buyer Name: with principal place of business at .

RECITALS

WHEREAS, Seller and Buyer have entered into an agreement pursuant to which Buyer will acquire certain assets and business lines of Seller as of the date set forth above (the Closing); and

WHEREAS, Buyer requires certain temporary services, facilities, systems and personnel support from Seller to effect an orderly transition of the acquired business (Transition Services); and

WHEREAS, Seller is willing to provide such Transition Services to Buyer on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. SERVICES

1.1 Services. Seller shall provide to Buyer the transitional services described in Schedule A attached hereto (the Services). Schedule A shall set forth a description of each Service, the deliverables (if any), the required personnel profiles and the applicable service levels. Seller shall perform the Services in a professional and workmanlike manner consistent with industry standards.

1.2 Modification of Services. Buyer may request changes to the Services. Seller shall consider such requests in good faith and, if accepted, the parties shall document any change in scope, schedule and fees in a written Change Order signed by authorized representatives of both parties.

2. TERM

2.1 Term. The term of this Agreement shall commence on the date first written above and, unless earlier terminated in accordance with Section 11, shall continue until (the Term).

2.2 Extension. The Term may be extended by mutual written agreement of the parties. Any extension shall be subject to renegotiation of fees and service levels where appropriate.

3. SERVICE LEVELS AND PERFORMANCE

3.1 Service Levels. Seller shall meet the service levels specified in Schedule A. If Seller fails to meet any applicable service level, Seller shall promptly cure the deficiency and, where specified in Schedule A, provide service credits or other remedies described therein.

3.2 Staffing. Seller shall allocate personnel with appropriate experience and qualifications to perform the Services. Seller shall be responsible for all compensation, taxes and benefits of its personnel unless otherwise agreed in writing.

4. FEES, INVOICING AND PAYMENT

4.1 Fees. As consideration for the Services, Buyer shall pay Seller fees in accordance with Schedule B. Rate(s) and pricing methodology are set forth in Schedule B and shall be applied to Services performed.

4.2 Invoicing. Seller shall submit monthly invoices itemizing Services provided, the period of performance, applicable rates, expenses (if any), and the total amount due. Invoices shall be submitted to the address specified in Section 12 and shall include reasonable supporting documentation.

4.3 Payment. Buyer shall pay undisputed invoice amounts within days of receipt. Disputed amounts must be reported in writing within fifteen (15) days of receipt, together with a detailed description of the dispute. Late payments shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by applicable law.

5. ACCESS; FACILITIES; EQUIPMENT

5.1 Access. Buyer shall provide Seller with reasonable access to personnel, premises, systems and information necessary for Seller to perform the Services. Access shall be subject to Buyer's reasonable security and confidentiality policies.

5.2 Facilities and Equipment. Unless otherwise agreed, Seller shall use its own equipment and facilities to perform the Services. Where Buyer makes facilities or equipment available to Seller, Buyer retains title and Seller shall use such assets only for the performance of Services and shall return them in the condition received, reasonable wear and tear excepted.

6. CONFIDENTIALITY; DATA PROTECTION

6.1 Confidential Information. Each party (Receiving Party) shall keep confidential and not disclose to any third party the Confidential Information of the other party (Disclosing Party) and shall use such Confidential Information only for the purposes of performing its obligations under this Agreement. Confidential Information excludes information that is or becomes publicly known other than by breach of this Agreement, or was known to the Receiving Party prior to disclosure as evidenced by written records.

6.2 Data Protection. To the extent Seller processes personal data on behalf of Buyer in connection with the Services, Seller shall implement and maintain appropriate technical and organizational measures to protect such personal data against unauthorized or unlawful processing and against accidental loss, destruction or damage. The parties shall cooperate to address data subject requests and security incidents in accordance with applicable data protection law.

7. INTELLECTUAL PROPERTY

7.1 Pre-Existing IP. Each party retains all right, title and interest in and to its pre-existing intellectual property. No license is granted except as expressly stated in this Agreement.

7.2 Work Product. All work product, deliverables and materials created by Seller specifically for Buyer under this Agreement shall be owned by subject to payment in full. Seller hereby assigns to such owner all right, title and interest in such work product, to the extent assignable.

8. INDEMNIFICATION

8.1 Seller Indemnity. Seller shall indemnify, defend and hold harmless Buyer and its officers, directors and agents from and against any third party claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising out of Seller's gross negligence or willful misconduct in the performance of the Services or Seller's breach of Sections 6 or 7.

8.2 Buyer Indemnity. Buyer shall indemnify, defend and hold harmless Seller from and against claims and liabilities arising from Buyer's ownership or operation of the acquired business following the Closing, except to the extent such claims arise from Seller's breach of this Agreement or the negligence or willful misconduct of Seller.

9. LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FRAUD, OR THIRD-PARTY INDEMNITY OBLIGATIONS PURSUANT TO SECTION 8, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, LOST PROFITS OR LOSS OF BUSINESS OPPORTUNITY ARISING FROM THIS AGREEMENT, AND EACH PARTY'S AGGREGATE LIABILITY SHALL BE LIMITED TO THE FEES PAYABLE TO SELLER UNDER THIS AGREEMENT FOR THE SIX (6) MONTHS PRECEDING THE CLAIM.

10. INSURANCE

Seller shall maintain policies of insurance customary for the Services provided, including commercial general liability and workers' compensation insurance, in amounts sufficient to cover its obligations hereunder. Upon request, Seller shall provide certificates of insurance to Buyer.

11. TERMINATION

11.1 Termination for Convenience. Either party may terminate this Agreement for convenience upon thirty (30) days' prior written notice to the other party.

11.2 Termination for Cause. Either party may terminate this Agreement immediately upon written notice if the other party materially breaches this Agreement and fails to cure such breach within fifteen (15) days after receipt of written notice specifying the breach.

12. EFFECTS OF TERMINATION

Upon expiration or termination of this Agreement, Seller shall cease providing Services and shall, at Buyer's direction, cooperate in the orderly wind-down and transfer of functions to Buyer or its designee. Buyer shall pay Seller for Services performed through the date of termination and for any reasonable wind-down costs preapproved by Buyer in writing.

13. NOTICES

13.1 Form of Notice. All notices required or permitted under this Agreement shall be in writing and delivered by personal delivery, nationally recognized overnight courier, or certified mail (return receipt requested), to the addresses set forth below or to such other address as a party designates by written notice in accordance with this Section.

14. AMENDMENTS; WAIVER; COUNTERPARTS

14.1 Amendments. No amendment to this Agreement shall be effective unless in writing and signed by authorized representatives of both parties.

14.2 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom the waiver is asserted. A waiver of any breach shall not constitute a waiver of any subsequent breach.

14.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

15. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

15.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified below without regard to its conflicts of law principles.

15.2 Entire Agreement. This Agreement, including the Schedules and any Change Orders, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and proposals, whether written or oral.

15.3 Severability. If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect and the parties shall negotiate in good faith a valid substitute provision that most nearly effects the parties' original intent.

SCHEDULE A — DESCRIPTION OF SERVICES

SCHEDULE B — FEES AND PRICING

Seller:

By:

Date:

Buyer:

By:

Date:

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What a Transition Services Agreement Is and when it’s used

The Transition Services Agreement (TSA) is a short-term contract used in mergers, acquisitions, divestitures, spin-offs, and asset sales to define interim services one party provides to another after closing. A TSA specifies which operational functions continue temporarily—such as IT hosting, payroll, finance, HR, facilities, and customer support—while the buyer implements permanent systems or vendors. It documents scope, service levels, fees, data handling, termination triggers, and responsibilities so both parties can manage continuity, reduce operational disruption, and limit disputes during the handover period.

Why a clear TSA matters for post-closing continuity

A properly drafted Transition Services Agreement minimizes business interruption, assigns clear interim responsibilities, allocates costs and liabilities, and creates a roadmap for migration to permanent arrangements.

Why a clear TSA matters for post-closing continuity

Which organizations and teams commonly use a TSA

Typical users include corporate deal teams and internal operations groups that must preserve services while ownership or systems change.

  • Buyers — legal, IT, and operations teams that require continuity and documented handover obligations during integration.
  • Sellers — corporate treasury, HR, and facilities that must supply temporary services while divesting assets or business units.
  • Third-party providers — service vendors or transitional staff that perform defined tasks under specified fees and SLAs.

The document also guides external vendors and advisers who support the transition and clarifies signatory authority for each party.

Core elements to include in a professional TSA

A comprehensive TSA lays out service scope, measurable performance standards, pricing, duration, security, change control, and exit mechanics to reduce ambiguity and litigation risk.

Service scope

Describe functions and deliverables in precise detail, listing systems, data, access privileges, staff roles, and excluded responsibilities to avoid scope creep during the transition.

Service levels

Define measurable SLAs and KPIs (response times, uptime, data availability) and the remedies or credits that apply when thresholds are missed.

Term and notice

State the effective date, initial term, renewal or extension mechanics, and the notice period required for termination or service reduction.

Fees and invoicing

Specify pricing (fixed, time-and-materials, or per-user), invoicing cadence, reimbursement rules, and dispute resolution for contested charges.

Data security

Include handling rules, encryption, access controls, incident response, and any Business Associate Agreement (BAA) or equivalent required for regulated data.

Exit and migration

Prescribe deliverables at termination—data export formats, knowledge-transfer activities, personnel transition, and acceptance criteria to complete the handover.

Essential information fields to collect on the TSA

Parties’ legal names: Full registered entity names
Effective date: MM/DD/YYYY effective date
Service description: Concise service list
Payment terms: Rates, invoicing cadence
Data protections: Encryption and access rules
Authorized signatories: Name and title required

Step-by-step: completing a Transition Services Agreement

Follow these practical steps to fill, review, and execute a TSA so services continue smoothly after closing.

  • 01
    Identify services: List every interim function and system to be provided
  • 02
    Set metrics: Assign SLAs, reporting, and measurement methods
  • 03
    Agree fees: Confirm rates, invoicing, and dispute process
  • 04
    Sign and distribute: Execute by authorized signatories and circulate executed copies

How to configure an online TSA workflow

Set up a simple, auditable e-signature workflow so every party receives a copy and the audit trail is preserved.

Field Configuration
Signature fields Assign role-based signature and date fields for each party
Order of signing Use sequential or parallel routing as negotiated
Authentication Enable email or SMS code authentication for signers
Audit and storage Capture audit trail and store a certified PDF

Where to send and how to route the executed TSA

Plan distribution so legal, finance, IT, and operations receive executed copies and access rights promptly.

  • Legal counsel: Send fully executed copy to both parties’ legal teams for retention and interpretation
  • Finance teams: Route invoice and payment sections to accounts payable for setup
  • IT and operations: Provide access instructions and credentials required for interim service delivery
  • Contract repository: Store executed PDF with audit trail in the central contract system

Digital signing and technical requirements for online execution

Choose a platform that preserves signed PDFs, provides an audit trail, and integrates with your document systems.

  • File formats: Accept PDF, DOCX, and HTML
  • Integrations: Salesforce, NetSuite, Microsoft 365, Google Workspace
  • Authentication: Email, SMS code, or stronger KBA as needed

Common timing items to include and monitor

Define clear dates and deadlines in the TSA for start, billing, interim reviews, and final handover to avoid disputes.

Effective date:

Date services begin; controls billing and SLA start

Service commencement:

Operational start-of-service milestone (often same day as closing)

Interim review points:

Scheduled progress checks (e.g., 30, 60, 90 days) depending on complexity

Termination date:

Final end date or maximum duration for temporary services

Data handover deadline:

Deadline for transferring data and delivering exit artifacts

Key milestones in a typical TSA timeline

Track these sequential milestones to manage obligations and measure progress from closing through final handover.

01

Closing and go-live

Services begin immediately after closing and handover logistics commence

02

Initial verification

Confirm access, credentials, and baseline performance within the first week

03

Midterm review

Evaluate SLA compliance and adjust scope or staffing as needed

04

Final migration

Complete data exports and knowledge transfer before service termination

Common mistakes to avoid when preparing a TSA

  • Vague scope descriptions that create dispute over whether a task is covered or billable, leading to unexpected costs and delays.
  • Absent or weak SLAs that leave parties without measurable standards for uptime, response times, or data availability during the transition.
  • No defined exit procedures or data formats, causing last-minute delays when transferring systems or migrating data to permanent providers.
  • Underestimating costs and staffing requirements for services, leading to disputes over invoicing, reimbursement, or the need for supplemental agreements.

Primary risks and consequences of a deficient TSA

Service interruption: Operational downtime
Data breach: Regulatory exposure
Cost overruns: Unexpected expenses
Legal disputes: Contract litigation
Regulatory noncompliance: Fines or sanctions
Accounting impact: Revenue recognition issues

Typical eSignature vendor pricing considerations for executing TSAs

When selecting an eSignature provider for a TSA, compare starting price, trial availability, bulk-send capability, audit trail, HIPAA support, and any envelope or session caps.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently asked questions about Transition Services Agreements

Answers to common legal, operational, and technical questions about creating, signing, and closing out a TSA.


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