Document:

Settlement Agreement dated June 30, 2007

 EXHIBIT 10.42 
 BEFORE THE STATE BOARD OF EQUALIZATION 
 OF THE STATE OF CALIFORNIA 
  

			
	In re:	  	Asset Liquidation Group, Inc.
		  	SR Z AP 17-772179
		  	Case ID: 169299

 Notice of 
 Determination: April 8, 2002 
 Period: April 1, 1996, to December 31, 1999 
  

				
	 Tax:
	  	$	2,173,388.67
	 Interest:
	  	 	953,633.09
	 Penalty:
	  	 	0.00
		  	 	 
	 Total:
	  	$	3,127,021.76
		  	 	 

 SETTLEMENT AGREEMENT 
 This Settlement Agreement (“Agreement”) is entered into by and between Asset Liquidation Group, Inc. (“Petitioner”) and the State
Board of Equalization (“SEE”), collectively referred to herein as “the parties,” and is made pursuant to the authority provided in California Revenue and Taxation Code Section 7093.5, as amended by Assembly Bill 3308
(Chapter 138, Stats, of 1994) effective July 7, 1994. 

 RECITALS 
 A. A Notice of Determination (the “Determination”) dated April 8, 2002, was issued by the SBE for the period April 1, 1996, to December 31, 1999 (the “settlement period”),
totaling $3,127,021,76. The Determination is incorporated into this Agreement by this reference. After a series of reaudits, the third reaudit report dated September 21, 2005, reduced the total liability (tax and interest) under the
Determination to $433,620.05 with interest computed through September 30, 2005. Currently, the total amount at issue (tax and interest) is $447,796.08 with interest calculated through September 30, 2006. 
 B. Petitioner protested the Determination. Under the protested Determination, the total tax liability in dispute and subject to this Agreement is
$254,614.69 (the tax liability), which the SBE contends is payable by Petitioner to the SBE under the Sales and Use Tax Law. The items in dispute under the protested Determination, and which, taken together, constitute the “dispute” are:

  

			
	Item 1.	  	Disallowed Claimed Sales for Resale
		
	Item 2.	  	Disallowed Claimed Sales in Interstate Commerce
		
	Item 3.	  	Withdraw of Resale Inventory, Subject to Use Tax
		
	Item 4.	  	Difference Between Recorded and Reported Sales Tax

 C. The parties desire to enter into this Agreement in order to resolve the dispute.

 D. Petitioner desires to effect a final and complete settlement of the tax liability, which is the subject of the Determination and
dispute described above, for the period in issue. 
 E. The SBE finds that settlement upon the terms set forth in this agreement is
reasonable from an overall perspective, in the best interests of the State of California, and in accordance with Revenue and Taxation Code Section 7093.5. 
  

 -2- 

 AGREEMENT 
 Accordingly, IT IS HEREBY STIPULATED AND AGREED between the parties that: 
 1. SETTLEMENT AMOUNT

 (a). Petitioner agrees to pay a total amount of $380,000.00 (the “settlement amount”) before the
execution of the Agreement by the SBE. The settlement amount is allocated as follows: 
  

											
	Tax	 	Interest	 	Penalty	 	Total
	$	218,000.00	 	$	162,000.00	 	$	0.00	 	$	380,000.00
			 			 			 	 	 

 The settlement amount, and all interest accruing thereon, and any other amounts accruing, owing,
or coming due under this Agreement, shall, in addition, be treated as and become a final “order and decision of the SBE upon a Petition for Redetermination” under Section 6564 of the Revenue and Taxation Code. By execution of this
Agreement, Petitioner expressly waives the thirty (30) day period set forth in that statute. 
 (b). To date, payments in the
amount of $101,547.52 on the settlement amount have been received by the SBE, leaving an unpaid balance of $278,452.48 which is due and payable from Petitioner to the SBE pursuant to the terms and conditions of this Agreement. All payments and
credits are subject to final verification by the BOE. 
 (c). On or before the effective date of his Agreement, Petitioner shall pay
the sum of $88,452.48 to the SBE (the initial payment). Thereafter, payment of the remaining balance of the settlement amount is to be made in installments as set forth in the following payment schedule. Payments equal to the amounts indicated on
the schedule are due and payable from Petitioner to the SBE on the indicated due dates. Interest will accrue on the unpaid balance of the settlement amount as set forth below. 
  

 -3- 

 Payment Schedule 
  

				
	 Payment Due
     Date
	  	Minimum Payment
Required
	 February 28, 2007
	  	$	48,000.00
	 March 31, 2007
	  	$	48,000.00
	 April 30, 2007
	  	$	48,000.00
	 May 31, 2007
	  	$
  
 
 
 
 
	46,0000.00 Plus
 Accrued Interest &
Any
Other
Amounts Due
Under This
Agreement

 On or before May 31, 2007, the entire remaining unpaid balance of the settlement amount, and
all accrued but unpaid interest thereon and any other amounts accruing, owing, or coming due under this Agreement, shall be due and payable in full. 
 (d). Beginning on the first day of the first calendar month which commences after the expiration of thirty (30) days from the effective date of this Agreement, interest shall accrue on the unpaid balance
of the settlement amount at an interest rate equal to that interest rate established and set forth in section 6482 of the Revenue and Taxation Code; which rate is subject to periodic adjustments pursuant to the terms and conditions of that statute.
As set forth above, all accrued interest is due and payable in full on May 31, 2007. 
 Should interest not be paid when due as provided
herein, it shall thereafter bear like interest as the unpaid balance of the settlement amount. 
 (e). Petitioner expressly reserves
the right to prepay, in whole or in part, the unpaid balance of the settlement amount owing under this Agreement, and any accrued interest thereon; provided that any prepayments shall be credited against those installment payments which are last due
and payable under this Agreement. 
 (f). In the event that any payment is not received by the SBE on or before the agreed due date as
indicated in (c) above, then, in addition to such other sums as are due hereunder, the undersigned Petitioner shall deliver, together with the delinquent payment, a sum equal to ten percent (10%) of the outstanding unpaid balance of the
settlement amount as a penalty under section 6565 of the Revenue and Taxation Code. 
  

 -4- 

 (g). The undersigned Petitioner waives presentment, demand, notice, protest and all other demands
and notices in connection with the delivery, acceptance, performance, default or enforcement of this Agreement, except as may be expressly stated to the contrary herein. No delay or omission on the part, of the SBE in exercising any rights hereunder
shall operate as a waiver of any right existing under this Agreement. 
 (h). The amounts due are payable in lawful money of the
United States drawn on a United States Clearing house. 
 (i). Should default be made of any installment or other payment when due, or
should Petitioner default as to any other provision of this Agreement, then the entire unpaid balance of the settlement amount, and all accrued interest thereon and any other amount accruing or coming due under this Agreement, shall become
immediately due at the option of the SBE. 
 2. EFFECTIVE DATE. This Agreement becomes effective upon the date of execution of the
Agreement by an authorized officer or employee of the SBE; provided that in no event shall this Agreement be effective until such time as: (1) The State Board of Equalization itself has approved the Agreement pursuant to Revenue and Taxation
Code Section 7093.5(e) and authorized the delivery of the executed Agreement to Petitioner; and (2) Petitioner has paid the initial payment to the SBE in good funds. 
 If Petitioner fails to pay the initial payment as indicated in this Agreement within thirty (30) days after the State Board of Equalization approves
the Agreement pursuant to Revenue and Taxation Code Section 7093.5(e), then, at the sole and exclusive option of the SBE, and without limitation the SBE may: 
  

	 	(a).	Reject this Agreement; 

  

	 	(b).	Withdraw any settlement offer previously made by the SBE; 

  

	 	(c).	Reject any settlement offer previously made by Petitioner; and 

  

	 	(d).	Terminate any pending or further settlement negotiations with Petitioner. 

 In the event that this Agreement does not become effective for any reason, then the terms and conditions hereof shall have no force or effect whatsoever, and interest upon any unpaid amount that is ultimately
determined as a deficiency pursuant to the Determination shall be assessed in accordance with Revenue and Taxation Code 6482. 
  

 -5- 

 3. NOTICES. All notices and deliveries required or permitted to be given under this Agreement
shall be in writing and shall be either delivered personally or mailed by First Class U.S. mail, postage prepaid, to the parties at the following addresses: 
  

			
	If to SBE:	  	Settlement Section
		  	State Board of Equalization
		  	450 N Street MIC: 87
		  	P.O. Box 942879
		  	Sacramento, CA. 94279-0087
		
	If to Petitioner:	  	Scott Norton, Senior Manager
		  	KPMG. LLP
		  	21700 Oxnard Street, Suite 1200
		  	Woodland Hills, CA 91367

 Personally delivered notices and documents shall be deemed given and delivered upon actual
personal delivery to the intended recipient. Mailed notices and documents shall be deemed given and delivered upon the earlier of three (3) business days after deposit into the First Class United States mail, with postage fully prepaid, or the
date of actual receipt as evidenced by a return receipt, if any. 
 4. SETTLEMENT PERIOD. By agreeing to this settlement, both parties
agree that the settlement applies to the period from April 1, 1996, to December 31, 1999, (the settlement period). Both parties agree that this settlement does not apply to periods prior or subsequent to the above-described settlement
period. 
 By agreeing to this settlement, neither party is conceding the merits of the other party’s position taken in the settlement
period covered by the Determination. This settlement has no effect on any tax liability in periods outside the settlement period for which this Agreement is entered. 
 By agreeing to this settlement, the SBE does not concede that any particular transactions included in the Determination are non-taxable transactions nor that Petitioner should not report the same or similar
transactions as taxable in future periods. 
  

 -6- 

 5. NON-PRECEDENTIAL. The terms of this Agreement are non-precedential. 
 6. WAIVER AND RELEASE. Petitioner hereby releases and discharges the SBE and its successors in interest from, and relinquishes any and all past,
present, or future claims, demands, obligations, or causes of action for compensatory or punitive damages, costs, losses, expenses, and compensations which Petitioner has against the SBE arising from or on account of the Determination, the dispute,
and/or the facts and circumstances set forth herein; provided, however, that this release shall not apply to claims arising out of or based upon a breach of any of the provisions of this settlement agreement or to any action taken to enforce this
settlement agreement. 
 Petitioner waives with prejudice any and all rights to file an administrative claim for refund, pursuant to Revenue
and Taxation Code Section 6904 or otherwise, with regard to any item included in the Determination or the dispute for the settlement period. 
 Petitioner waives with prejudice any and all rights to file an action against the SBE, pursuant to Revenue and Taxation Code Section 6933 or otherwise, with regard to any item included in the Determination or the dispute for the
settlement period. 
 7. GOVERNING LAW AND VENUE. This Agreement shall be construed and interpreted in accordance with the laws of the
State of California. The parties, and each of them, hereby agree to submit to the jurisdiction of the California courts in any action relating to this agreement or the enforcement or interpretation of the terms and conditions of this Agreement.
Proper venue shall be in the appropriate court in the County of Sacramento. 
 8. ATTORNEYS’ FEES AND COSTS. Each party shall
bear any and all attorney’s fees and costs arising from the actions of its own counsel in connection with the Determination, the dispute, and the resolution of the dispute, including without limitation those fees and costs relating to or
stemming from the negotiation, execution, performance, and/or enforcement of this Agreement. 
  

 -7- 

 9. TAX LIABILITY FOR OTHER MATTERS AND OTHER PERIODS. This Agreement applies only to the
Determination and the dispute between the parties arising out of the facts and circumstances recited herein for the settlement period. Notwithstanding anything else set forth herein, this Agreement shall not limit the SBE’s ability to make
further adjustments to Petitioner’s sales and use tax liability arising out of or stemming from other facts and circumstances, or relating to or arising from periods other than the settlement period covered by this Agreement. This Agreement
shall likewise not limit Petitioner’s ability to contest such adjustments. 
 Further, this Agreement shall not affect any limitation
periods for deficiencies or for filing claims for refund. However, any deficiencies or claims for refund filed with regard to the settlement period, if any, must pertain only to items (1) not included in the Determination, (2) not in
dispute as set forth in this Agreement, and (3) not arising out of or stemming from the facts and circumstances of the Determination or the dispute (See paragraph B of the Recital for a listing of the disputed items). 
 10. NO ADMISSION OF LIABILITY; INADMISSIBILITY. Nothing contained in this Agreement shall be taken, or construed to be an admission on the part of
any party or person or evidence of any claims, demands, causes of action, obligations, damages, liabilities, facts, or legal conclusions asserted by any party or person. The terms of this Agreement shall not be admissible for purposes of
establishing liability in any civil action, or in any administrative proceeding or hearing under California Evidence Code section 1152, except as may be necessary to enforce the terms of the Agreement. 
 11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the parties. There are no promises, terms, conditions, or obligations other
than those contained or attached to this Agreement. This Agreement supersedes all prior agreements or understandings, whether written or oral, of the parties hereto. Petitioner acknowledges that no representations of fact or opinion were made by the
SBE or anyone on the SBE’s behalf to induce Petitioner to execute this Agreement relating to the nature, basis, or amount of the settlement. 
 12. WARRANTIES. Each party represents and warrants to the other party that its signatory to this Agreement has the authority to execute this Agreement on its behalf. 
  

 -8- 

 13. EFFECT ON SUCCESSORS. This agreement is binding on the parties and their personal
representatives, successors in interest, assignees for the benefit of creditors, and bankruptcy trustees of the parties, and each of them. 
  

			
		 	Asset Liquidation Group, Inc.
		
	Date: October 10, 2006	 	 

		 	by
		
		 	 Vice President General Counsel

		 	Capacity
		
		 	State Board of Equalization
		
	Date: 5/16/07	 	 

		 	by
		
		 	 Chief Counsel

		 	Capacity

  

 -9-Closing Agreement

 EXHIBIT 10.43 
 Department of Treasury — Internal Revenue Service 
 FORM 906 
 CLOSING AGREEMENT ON FINAL DETERMINATION 
 COVERING SPECIFIC MATTERS 
  
  
 Under Section § 7121 of
the Internal Revenue Code (“IRC “). Asset Liquidation Group, Incorporated, d.b.a. Nationwide Auction Systems, 13005 East Temple Avenue, City of Industry, California 91746, EIN:93-0986235,
[“the Taxpayer”] and the Commissioner of Internal Revenue [“the Commissioner”] make the following Closing Agreement: 
 WHEREAS, the Taxpayer conducts public auctions at various locations for the sale of governmental, commercial and personal property, including automobiles, trucks, busses, farm equipment, heavy equipment
and machinery, electronics, consumer goods and aircraft; 
 WHEREAS, a dispute has arisen between the parties
concerning the Taxpayer’s failure to file Form 8300 as required by IRC § 60501 with respect to currency received from those sales during the calendar years 2003,2004,2005 and 2006 and the Taxpayer’s failure to furnish annual
statements to each person whose name is identified on Form 8300 as required by IRC § 6050I(e); 
 WHEREAS, the Taxpayer
was previously subject to a Form 8300 compliance examination for the calendar years 1995 and 1996. That examination revealed 102 failures to file Form 8300. For those failures, the Commissioner assessed a penalty against the Taxpayer pursuant to IRC
§ 6721(a) in the amount of $5,100. The Taxpayer promptly paid the assessed penalty; 
 WHEREAS, on December 2,1997,
the Taxpayer’s controller signed an IRS Form “Acknowledgement of Requirement to File Forms 8300.” The Acknowledgment stated that the controller was advised that any receipt of currency exceeding $10,000, whether in one installment or
multiple installments by or on behalf of the same person, should be reported to the Internal Revenue Service by 

 Form 906, CLOSING AGREEMENT ON FINAL DETERMINATION COVERING SPECIFIC MATTERS 
 Asset Liquidation Group, Incorporated EIN: 93-0986235 
  

 
using Form 8300, by the 15th day after the date of the
transaction. The Acknowledgement further stated that a year-end statement must be mailed to the person giving the cash by 1/31 of the year after the cash was received. Finally, the Acknowledgement stated that the controller was advised that civil
and criminal penalties may be imposed for failing to file a report or to supply information, structuring transactions, and for filing a false or fraudulent report; 
 WHEREAS, as the result of a second Form 8300 compliance examination of the Taxpayer during 2006 the Commissioner made the following determinations: 
  

							
	 Year
	  	 # of Required 8300s
	  	 # of Filed 8300s
	  	 # of Delinquent 8300s

	 2003
	  	347	  	44	  	303
	 2004
	  	272	  	173	  	99
	 2005
	  	311	  	103	  	208
	 2006
	  	175	  	93	  	82

 WHEREAS, the Commissioner further determined that the Taxpayer failed to provide the
annual notification to its cash customers who were (or should have been) identified by name on Form 8300 as follows: 
  

							
	 Year
	  	 # of Required 8300s
	  	 # of Notifications
	  	 # of Delinquent Notifications

	 2003
	  	347	  	-0-	  	347
	 2004
	  	272	  	-0-	  	272
	 2005
	  	311	  	-0-	  	311
	 2006
	  	175	  	(not due until January 31, 2007)	  	-0-

 WHEREAS, the Commissioner proposed to assert against the Taxpayer an intentional
disregard penalty pursuant to IRC § 6721(e) in the amount of $8,084,901, $2,597,413, $5,285,867 and $2,096,151 for the calendar years 2003,2004,2005 and 2006, respectfully; 
 WHEREAS, the Commissioner proposed to assert against the Taxpayer an intentional disregard penalty pursuant to IRC § 6722(c) in the
amount of $623,461, $463,081 and $483,400 for the calendar years 2003,2004 and 2005, respectfully; 
  

 Page 2 of 6 

 Form 906, CLOSING AGREEMENT ON FINAL DETERMINATION COVERING SPECIFIC MATTERS 
 Asset Liquidation Group, Incorporated EIN: 93-0986235 
  

 WHEREAS, the Taxpayer has timely provided the annual statements required to be
furnished to each person named on Form 8300 for transactions taking place in 2006; 
 WHEREAS, the Taxpayer has engaged new
management and has adopted improved training and compliance procedures in response to the Commissioner’s determinations in order to further ensure current and continued timely compliance with the provisions of IRC § 60501; and 

WHEREAS, the Taxpayer and the Commissioner desire to resolve with finality all questions concerning the Taxpayer’s obligations to
file Form 8300 to report currency transactions that occurred during the calendar years 2003,2004,2005 and 2006 including the obligation to furnish the required annual statement to each person whose name should have been identified on that form for
those years. 
 NOW IT IS HEREBY DETERMINED AND AGREED FOR FEDERAL TAX PURPOSES THAT: 
 1. Pursuant to IRC § 6721 (e), the Taxpayer is liable for penalties in the following amounts: 
  

				
	 2003
	  	$	15,150
	 2004
	  	$	4,950
	 2005
	  	$	10,400
	 2006
	  	$	4,100

 2. Pursuant to IRC § 6722(c), the Taxpayer is liable for penalties in the following amounts:

  

				
	 2003
	  	$	17,350
	 2004
	  	$	13,600
	 2005
	  	$	15,550

 3. The Commissioner will not assert further penalties against the Taxpayer pursuant to IRC §
6721 for currency transactions, if any, that occurred during the calendar years 2003,2004,2005 and 2006 for which the Taxpayer failed to file a Form 8300. 
  

 Page 3 of 6 

 Form 906, CLOSING AGREEMENT ON FINAL DETERMINATION COVERING SPECIFIC MATTERS 
 Asset Liquidation Group, Incorporated EIN: 93-0986235 
  

 4. The Commissioner will not assert further penalties against the Taxpayer pursuant to IRC §
6722 for currency transactions, if any, that occurred during the calendar years 2003,2004, and 2005 for which the Taxpayer failed to furnish correct payee statements. The parties agree that the Taxpayer is not subject to penalties pursuant to IRC
§ 6722 for currency transactions that occurred during the calendar year 2006. 
 5. Within seven (7) days of the date that the
Commissioner’s delegate countersigns this Form 906 Closing Agreement, the Taxpayer will provide the Commissioner’s delegate with a cashier check in the amount of $81,100 in full satisfaction of the penalties determined in paragraphs #1 and
#2 above, 
 This agreement is final and conclusive except: 
 (1) The matter to which it relates may be reopened in the event of fraud, malfeasance, or misrepresentation of material fact; 
 (2) It is subject to the Internal Revenue Code sections that expressly provide that effect be given to their provisions (including any stated exception for Code section 7122) notwithstanding
any other law or rule of law; and, 
 (3) If it relates to a tax period ending after the date of this agreement, it is subject to any
law, enacted after the agreement date, that applies to that taxable period. 
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 Page 4 of 6 

 Form 906, CLOSING AGREEMENT ON FINAL DETERMINATION COVERING SPECIFIC MATTERS 
 Asset Liquidation Group. Incorporated EIN: 93-0986235 
  

 By signing, the above parties certify that they have read and agreed to the terms of the document. 

TAXPAYER: Asset Liquidation Group, Incorporated 
  

							
	By:	  	 

	 		 	Date signed: 4/27/07
	Title:	  	V.P. - Gen. Counsel	 		 	

  

							
	Commissioner of Internal Revenue	 		 	
				
	By:	  	 

	 		 	Date signed: 5/15/07
	Title:	  	Acting Director Fraud/BSA	 		 	
				
	//	  		 		 	

  

 Page 5 of 6

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