The Transition Services Agreement (TSA) is a critical document used in South African corporate transactions to ensure smooth business operations during transition periods. It becomes necessary when one entity needs to temporarily provide services to another following a corporate transaction such as a merger, acquisition, or divestiture. The agreement must comply with South African legislation, including the Companies Act, POPIA, Labour Relations Act, and B-BBEE requirements. It typically covers areas such as IT systems, human resources, accounting, procurement, and other operational functions. The document is structured to provide clear service descriptions, performance metrics, cost allocation, and governance frameworks while incorporating specific South African regulatory requirements and market practices.

1. Parties: Identification of the service provider and recipient, including registration details and addresses

2. Background: Context of the transition, including reference to any major transaction necessitating the TSA

3. Definitions and Interpretation: Key terms used in the agreement, including South Africa-specific regulatory terms

4. Term and Duration: Period of the agreement, including commencement date and termination provisions

5. Services: Description of transition services to be provided, service levels, and performance standards

6. Service Levels and Performance Standards: Detailed metrics and standards for service delivery

7. Fees and Payment Terms: Pricing, payment schedules, invoicing, and VAT considerations

8. Personnel and Resources: Allocation of staff and resources, including any secondment arrangements

9. Data Protection and Confidentiality: POPIA compliance requirements and confidentiality obligations

10. Intellectual Property: Ownership and usage rights of IP during and after transition

11. Governance and Reporting: Management structure, reporting requirements, and oversight mechanisms

12. Warranties and Indemnities: Standard and specific warranties, indemnification provisions

13. Limitation of Liability: Liability caps and exclusions

14. Force Majeure: Events excusing performance and related procedures

15. Termination: Termination rights, consequences, and post-termination obligations

16. Dispute Resolution: Process for resolving disputes, including South African jurisdiction clauses

17. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law