World425_tas_01

Review the due diligence file for Summit Filing Solutions, Inc. and identify any potential deficiencies relative to its claimed status as an S-Corporation.  Draft a set of indemnities, for incorporation into the Harbor Bridge share purchase agreement, covering the claimed S-Corporation status and specifically referencing any potential deficiencies in the file relative to that status.

Reply back to me here, outlining what you find. 

Indemnification Regarding S-Corporation Status

The Sellers shall, jointly and severally, indemnify, defend, and hold harmless Harbor Bridge Private Equity (the "Harbor Bridge") and its affiliates (including the Summit Filing Solutions, Inc. (the "Company") after Closing) from and against any and all Taxes, losses, damages, expenses, and liabilities (including reasonable attorney fees and advisor fees), and the dimuntion of Tax attributes arising out of or resulting from any determination that the Company is not a validly electing S-corporation within the meaning of 26 U.S.C. §§ 1361 and 1362 from January 1, 2019, to the date hereof or that such status has been terminated between January 1, 2019, and the date hereof.  Such indemnification shall include, but not be limited to, losses, damages, and liabilities arising out of:  (1) the 2022 transfer of Company shares to a non-resident alien, Carrie Canuck; (2) a determination that section 2.5 of the Amended and Restated Shareholder Agreement creates a preference for shareholders who have made loans to the Company, thus creating a second class of stock, and (3) any other transaction, agreement, filing or lack thereof, which terminated the S-Corporation status of Summit Filing Solutions, Inc.

The indemnification obligations in this clause shall survive the closing of the acquisition and shall continue in full force and effect until the expiration of the applicable statute of limitations for the assessment of the Taxes that are the subject of this clause.