TSAs Compared to outsourcing agreements, Beit-TSAs and outsourcing contracts often include a portion that provides the other party with services that can be critical to the operation of the service recipient`s business. However, a fundamental difference in ASD is that the seller (as a service provider) is generally not active in the delivery of these services. In addition, the seller`s IT organization may lack discipline and the usual processes of professional outsourcing companies. Similarly, the degree to which the service is adapted under an ASD is generally more limited than in an outsourcing contract, particularly when the seller uses the same systems to serve the buyer and the transaction received by the seller. For these reasons, the seller can only be willing to commit to providing TSA services in the same way that he provides similar services for himself. Carveouts are among the most complex transactions. This is particularly the case when it comes to the sale of an integrated industry in the rest of the parent company`s business. In such transactions, the seller may be required to continue to provide the buyer with assistance for critical services after closing. This support is formalized by a Transitional Service Agreement (TSA) and includes one of the documents signed at the time of conclusion (in addition to share and/or asset sales contracts).

From the buyer`s point of view, ensuring that an ASD is structured as efficiently as it balances business continuity and ensures support and reliability, while ensuring fair service costs, is a key factor in successful deals. Here are some of the most important considerations in structuring an ASD: Knowing where you stand and planning ahead Just as outsourcing agreements, it is important to perform the correct diligence to avoid unpleasant surprises. For example, software licenses need to be verified when it comes to IT services. If software licenses are part of the assets sold, a combination of the sales contract and the TSA must handle the licensing process, including vendor approval fees, that bear the financial risk for licenses that cannot be transferred and must be purchased. If third-party licenses or outsourcing agreements are involved in supporting an ASD, they should be included in the pricing – p.B. Cost of the MS Sharepoint license, if the buyer opts for TSA support for the seller`s Sharepoint sites. If the licensing or outsourcing period exceeds the TSA period, renewal costs must also be included in the pricing. In any event, the scope of TSA and TSA reverse services should be at the forefront, as is the case in other service agreements, such as outsourcing agreements.B. However, unlike other service agreements, ASDs are only part of the entire R and D, for which neither party is willing to assume additional responsibility. As a result, ASDs generally contain no provisions or only minimal provisions for, compensation, warranties, service level agreements, business continuity and disaster recovery as well as data protection and information security. The comments and questions that follow make it better to “do things you need to do yourself,” not “that`s what they need to do to have a successful ASD” – in addition to the fact that all participants should be communicated to each other and that the agreement should be very detailed.