Carve-Out Toolkit: Separation Plans, TSA Schedules, and Shared Contract Allocation

Document type: Toolkit Practice area: Corporate — Mergers and Acquisitions Jurisdiction: United States (federal and state), with cross-border notes Last reviewed: 5 September 2026

How to use this toolkit

These are operating documents for a transaction that manufactures a business rather than buying one. The legal frame is in the companion article; two points govern most of the drafting here. Intellectual property licenses do not travel by default — Cincom Systems, Inc. v. Novelis Corp., 581 F.3d 431 (6th Cir. 2009) held that even an internal reorganization can breach one, and PPG Industries, Inc. v. Guardian Industries Corp., 597 F.2d 1090 (6th Cir. 1979) states the non-assignability default. And assignment formalities are statutory: 35 U.S.C. § 261 for patents, 15 U.S.C. § 1060 for trademarks with the goodwill, and 17 U.S.C. § 204 for copyrights.

Tool 1: Perimeter definition worksheet

Rules. Schedule by name, not by standard. Use "primarily related to the Business" only as a residual sweep, paired with a wrong-pockets provision. Every row marked "Shared" needs a treatment decision and an owner before signing.

Tool 2: Shared contract allocation matrix

The four buckets.

1 — Assign in whole. Predominantly the Business's. Consent needed in most cases. Add a license-back or services arrangement if the seller still needs anything.

2 — Split / partially assign. Two contracts from one. Requires the counterparty's active cooperation, which it will price.

3 — Retain and pass through. Seller performs, buyer receives the benefit. Confirm no breach of the underlying contract; set a sunset.

4 — Terminate and replace. Buyer contracts on its own. Always quantify the pricing dis-synergy — it belongs in the standalone model and in the price negotiation.

Flag separately, in a column of its own: contracts whose transfer restriction reaches internal reorganizations or changes of control, because those bite at the reorganization step before any sale occurs.

Tool 3: Consent request letter

[Date] — [Counterparty]

Re: [Agreement dated __] (the "Agreement") — Request for Consent

[Seller] has entered into an agreement to divest its [Filtration] business to [Buyer]. As part of the transaction, [Seller] proposes to [assign the Agreement to / partially assign the Agreement to] [NewCo], which will own and operate the [Filtration] business following closing.

What we are asking for. Your written consent under Section [__] of the Agreement to [the assignment / the partial assignment described on the attached schedule], effective as of the closing.

What will not change. [The scope of products and services purchased; the pricing and payment terms; the ordering and delivery arrangements; the operational contacts; the facilities served.] [NewCo] will assume all obligations under the Agreement [as they relate to the Business] and [Seller] will remain responsible for obligations relating to the retained business.

About [Buyer / NewCo]. [Brief description; financial capacity; continuity of management and operations.]

Timing. We would appreciate your response by [date]. Please contact [name, title, phone, email] with any questions, and we are happy to arrange a call.

Attached: form of consent; schedule of allocated volumes (for a partial assignment); [Buyer] overview.

Practical notes. Send early — a counterparty that learns of the transaction and the deadline at the same time will price accordingly. Lead with what does not change. Provide a form of consent to sign rather than asking the counterparty to draft one. And keep a log with contact history, position, and any price demanded.

Tool 4: TSA schedule template

One per service. Drafted by the person who performs the service.

Service: Accounts Payable Processing Schedule No.: F-03 · Function: Finance · Provider: Seller · Recipient: Buyer

1. Description of Service. Provider will (a) receive supplier invoices addressed to the Business at [address / mailbox]; (b) match invoices to purchase orders and receipts in [system]; (c) route exceptions to Recipient's designated approver; (d) process approved invoices for payment on Provider's standard weekly payment run; (e) execute payments from Recipient's designated bank account; (f) maintain the vendor master for Business vendors, adding and modifying vendors on Recipient's written instruction; and (g) provide a weekly AP aging and payment register in [format].

2. Excluded. Vendor negotiation; dispute resolution with vendors; approval of invoices; funding of the payment account; tax determination beyond system defaults; anything not listed in Section 1.

3. Volume assumptions. Up to [4,200] invoices per month and [180] vendors. Volumes exceeding assumptions by more than [15]% in any month are charged at $[__] per incremental invoice.

4. Recipient dependencies. Recipient will (a) maintain a funded payment account with a minimum balance of $[__]; (b) designate approvers and maintain the approval matrix; (c) respond to exception routing within [2] business days; and (d) provide vendor master change instructions in the agreed format. Provider is excused from the service level to the extent of a Recipient dependency failure.

5. Systems. [SAP module], [AP workflow tool], [banking platform].

6. Personnel. [2.5] FTE in Provider's shared services center in [location]. Named lead: [__].

7. Charges. Fully loaded cost of the personnel and systems allocated to the Service, plus [5]% for months 1–12, [15]% for months 13–18, and [30]% thereafter. Third-party costs passed through at actual. Invoiced monthly in arrears.

8. Term. [12] months from the Closing Date, extendable by Recipient on [60] days' notice for up to [2] additional periods of [3] months each at the escalated rate. Outside date: [24] months from Closing.

9. Service level. Invoices processed within [3] business days of approval, measured monthly, at not less than the level Provider achieved for the Business in the twelve months prior to the Closing Date, as set out in Annex A. Service credit of [5]% of the monthly charge for the Service for each month below the level.

10. Exit deliverables. (a) Vendor master data in [format]; (b) open AP ledger with aging; (c) 24 months of payment history; (d) process documentation; (e) up to [40] hours of knowledge transfer; (f) certification of deletion of Recipient data within [60] days of termination.

11. Governance. Provider contact: []. Recipient contact: []. Monthly service review. Escalation to [] and [].

Repeat for every service. A TSA with thirty-one services has thirty-one of these. The failure mode is a one-line service description, and it produces a dispute every time.

Tool 5: TSA master terms — the provisions that matter

Standard of performance.

Provider shall perform each Service with the degree of skill, care, and diligence with which it performed such service for the Business during the twelve (12) months prior to the Closing Date, and in no event with less care than it applies to similar services for its own retained businesses. Provider does not warrant any level of performance exceeding that historically achieved for the Business.

Exit and migration — the buyer-protective version.

(a) Termination for convenience. Recipient may terminate any Service, in whole or in part, on [30] days' written notice, without payment of any termination fee, wind-down charge, or minimum-volume shortfall, other than third-party costs actually and irrevocably committed by Provider in reliance on the Service that cannot reasonably be mitigated.

(b) Migration cooperation. Provider shall, at Recipient's cost and upon reasonable request, provide reasonable assistance to migrate each Service to Recipient or its designee, including: participating in migration planning; providing data extracts in the formats specified in the applicable Schedule; providing process documentation; making personnel available for knowledge transfer up to the hours specified; and testing and validating cutover.

(c) Migration plan. Within [60] days after the Closing Date, the parties shall agree a written Migration Plan for each Service, setting out milestones, responsibilities, and target exit dates. The parties shall review progress against the Migration Plan at each monthly governance meeting.

(d) Data. Provider shall deliver all Recipient data in a commercially usable, documented electronic format within [30] days after termination of the applicable Service, and shall certify deletion of all copies within [60] days thereafter, other than copies retained in routine backup media which shall be subject to continuing confidentiality obligations.

Liability.

Neither party shall be liable for indirect, consequential, incidental, special, or punitive damages, or for lost profits, arising from the Services. Provider's aggregate liability shall not exceed [12] months' Charges for the affected Service. The foregoing shall not apply to (a) breaches of confidentiality, (b) gross negligence or willful misconduct, or (c) Provider's indemnification obligations for third-party claims.

Change control.

Neither party shall change the scope, systems, personnel, or method of delivery of any Service without the other's written consent, except (a) changes required by law, (b) changes applied generally to Provider's own operations that do not materially and adversely affect the Service, and (c) changes agreed under the Change Control Procedure in Annex [__]. Any change increasing Charges requires Recipient's prior written consent.

Regulatory and data protection. A data processing agreement addressing the shared-systems period, cross-border transfer mechanisms, security standards, breach notification timing, and audit rights.

Tool 6: Wrong pockets and non-obtained consents

Wrong pockets.

Excluded Assets Held by Buyer. If at any time within [24] months after the Closing either party identifies any asset held by Buyer or its Affiliates that constitutes an Excluded Asset, or any Liability assumed by Buyer that constitutes a Retained Liability, Buyer shall promptly transfer such asset, or Seller shall promptly assume such Liability, in each case for no additional consideration, and the parties shall execute such instruments as are reasonably necessary.

Transferred Assets Held by Seller. [Mirror provision.]

Interim treatment. Pending any such transfer, the holding party shall hold the asset for the benefit and at the risk of the other party, shall not dispose of it, and shall pay over any proceeds or benefits received. Reasonable out-of-pocket costs of transfer shall be borne by the transferring party.

Non-obtained consents.

(a) Nothing in this Agreement constitutes an assignment of any Contract if an attempted assignment without a required consent would be void or would constitute a breach.

(b) Until such consent is obtained, Seller shall, at Buyer's cost and direction: (i) hold the Contract and the benefits thereunder in trust for Buyer; (ii) enforce the Contract, at Buyer's request and expense, against the counterparty; (iii) promptly pay over to Buyer all monies received under the Contract in respect of the Business; and (iv) take such other lawful actions as Buyer reasonably requests to provide Buyer the economic benefit of the Contract. Buyer shall perform, or bear the cost of performing, Seller's obligations under such Contract to the extent relating to the Business.

(c) The parties shall use [commercially reasonable efforts / their respective reasonable best efforts] to obtain each such consent for [18] months after Closing. Seller shall not be required to pay any consideration to obtain any consent except as set out on Schedule [__] (Allocated Consent Costs).

(d) [Material Contracts only:] If any consent listed on Schedule [] (Material Consents) is not obtained within [12] months after Closing, [the parties shall negotiate in good faith an adjustment to the Purchase Price of up to $[] / Buyer's sole remedy shall be the arrangements in clause (b)].

Tool 7: Transitional trademark license

1. Grant. Seller grants Buyer a non-exclusive, royalty-free, non-transferable, non-sublicensable (except to Buyer's Affiliates and to contract manufacturers performing for Buyer) license to use the Marks solely in connection with the Business, in the Territory, for the Transition Period.

2. Permitted uses and sunset dates.

Use	Sunset
Existing packaging, labels, and printed materials in inventory at Closing	[9] months, or until exhausted, whichever is earlier
New packaging and labels	[0] months — not permitted
Products bearing the Marks manufactured before Closing	Sale permitted until inventory exhausted
Signage at transferred facilities	[12] months
Domain names and email addresses	[12] months, with redirection thereafter
Business cards, uniforms, vehicles	[6] months
Foreign entity names containing the Marks	[12] months to change of name
Regulatory filings and certifications	[18] months or until reissuance, whichever is earlier

3. Quality control. Buyer shall maintain quality standards for goods and services bearing the Marks at least equal to those maintained by Seller for the Business immediately prior to Closing. Seller may, on reasonable notice and no more than [twice] during the Transition Period, inspect Buyer's facilities and samples to verify compliance. Buyer shall correct any material deficiency within [30] days of notice.

4. Rebranding plan. Buyer shall deliver a written rebranding plan within [60] days after Closing and shall report progress against it quarterly.

5. Ownership and goodwill. The Marks and all goodwill arising from Buyer's use inure solely to Seller. Buyer shall not challenge Seller's ownership or register any confusingly similar mark.

6. Termination. Immediately on Buyer's uncured material breach of Section 3, and automatically on the last sunset date.

Why Section 3 is not optional. A trademark license without meaningful quality control risks abandonment of the licensor's rights. And any accompanying assignment of transferred marks must include the goodwill of the business, as 15 U.S.C. § 1060 requires.

Tool 8: Standalone and stranded cost worksheet

Buyer side — standalone cost build.

One-time separation costs: IT implementation · rebranding · recruiting · facility fit-out · duplicate running costs during transition · advisory and legal fees · customer requalification.

Seller side — stranded cost.

The number that decides the negotiation is neither carve-out EBITDA nor the TSA cost. It is the bridge: allocated → TSA → standalone. Whoever builds it more credibly wins the price discussion.

Tool 9: Employee transfer matrix

Companion analyses to attach.

• WARN, 29 U.S.C. § 2101 and state mini-WARN: site-by-site headcount, offers made, and the notice conclusion — run before the offer list is final.
• Health continuation under 29 U.S.C. § 1161: who is responsible for whom.
• Qualified plans: spin-off, transfer, or distributable event, analyzed under 26 U.S.C. § 414.
• Automatic transfer jurisdictions: consultation timetable, works council milestones, and the resulting closing-date constraint.
• Retention: pool size, allocation between the parties, individual amounts, clawback terms, and funding date relative to announcement.

Tool 10: Day-one readiness dashboard

Reviewed weekly from eight weeks out. Green / Amber / Red, by function, with a named owner.

The standard: nobody outside the company notices anything.

Tool 11: Separation management office charter

Purpose. To plan and execute the separation of the [Filtration] Business from [Seller] and its establishment as a standalone business under [Buyer] ownership.

Structure. A full-time Separation Lead appointed by each party. Workstream leads for: IT · Finance · HR · Legal · Tax · Procurement · Operations · Real Estate · Quality and Regulatory · Communications. A Program Manager owning the integrated plan.

Steering Committee. [Named executives] from each party, meeting weekly [biweekly until eight weeks before Closing], with authority to resolve escalated issues.

Deliverables. (a) Integrated plan with dependency map; (b) day-one readiness dashboard; (c) TSA schedules drafted by service owners; (d) issues log with owners and dates; (e) standalone and stranded cost models; (f) migration plans per TSA service.

Operating rules. Every open item has an owner and a date. Escalation after [5] business days without resolution. Clean team protocol governs competitively sensitive information [where applicable], with defined membership and permitted uses.

Knowledge capture. The Separation Lead shall identify Seller personnel with material undocumented knowledge of the Business and shall ensure process documentation, system configurations, and customer history are captured before those personnel are reassigned.

Tool 12: TSA exit tracker

Operating rules. Exit services individually as each becomes unnecessary rather than waiting for a global cutover — every exit reduces cost and dependence. Review at the monthly governance meeting. Escalate any service without an agreed migration plan sixty days before its term end. And do not close a row until deletion is certified on both sides.

Related documents

• Carve-Out Transactions and Transition Services: Separating a Business That Was Never Separate
• Executing a Carve-Out and a TSA: A Practical Guide
• Carve-Out Separation Checklist: A Practical Checklist
• Deal Structuring Toolkit: Allocation Schedules, Assignment Consents, and Liability Carve-Outs
• Acquisition Agreement Toolkit: Reps, Schedules, Escrows, Earnouts, and Claim Notices
• Earnout Toolkit: Milestone Definitions, Accounting Protocols, and Dispute Submissions

This toolkit is general information, not legal advice, and does not create an attorney-client relationship. Adapt every document to the transaction.