Tech & Sourcing @ Morgan Lewis

Transition services agreements (TSAs) are often an integral part of a transaction when a buyer or a seller needs to use the other’s services, infrastructure, or resources for an agreed-upon period of time after an acquisition.

Key Considerations

The following is a list of key considerations for both buyers and sellers in connection with negotiating a TSA.

Definition of Services. The definition of “services” should include all the services the parties agree will be included as transition services. The schedules should also set forth the length of time the services will be provided, and any specific fees for each service. A party that is receiving services should consider adding a “catch-all” phrase to ensure that any services that are necessary for the operation of the business in the 12-month period prior to the closing will be included, regardless of whether or not the services are accurately listed on the schedule. The parties should also document any specifically agreed-upon exclusions to the definition of services.