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Lawsuit Re Cindy Allen's Sale Of Her ETA Ad Firm Indicates 3 Yrs Of Continuing Payments to Allen Of 10% Of Firm's Net Revenue On These Terms
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Lawsuit Re Cindy Allen's Sale Of Her ETA Ad Firm Indicates 3 Yrs Of Continuing Payments to Allen Of 10% Of Firm's Net Revenue On These Terms
Purchase agreement refers to two (plural) SBA EDTLs
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(Oct. 7, 2020, 8:40 a.m.) -- Among roughly 600 pages of attachments to the civil lawsuit brought by the two buyers of Cindy Allen's ETA advertising is a July 20, 2020 Stock Purchase Agreement, which includes a provision (details below) entitling Allen to receive for three years 10% of net revenue "actually earned by the company" from either clients listed in Disclosure Schedules (lengthy list below) or from "future clients of the company" if Allen "meaningfully participates in securing the Net revenue of the Company."
The Stock Purchase Agreement details how the transaction handles company debt in connection with the sale price and includes a reference to "two SBA loans" (plural) [not one (singular), seemingly inconsistent with complaint allegations regarding a single SBA loan.]
Under the sale agreement, the 10% payments to Ms. Allen would presumably continue if she were elected to the 2nd district Council seat she's now seeking with endorsers/campaign contributors including Mayor Robert Garcia, a number of incumbent Councilmembers and several area electeds. The 10% provision might not have become public at this point were it not for the buyers' civil lawsuit as Ms. Allen had elsewhere cited a confidentiality provision of the agreement to avoid discussing details of the sale. (The revenue might surfaced after the election in annual income (conflict of interest disclosure) forms required for elected officials.)
The Stock Purchase agreement provides in pertinent part:
[Scroll down for further.]
Section 1.02 Purchase Price. Subject to the terms and conditions set forth herein, and in consideration of the Company retaining the two SBA loans and Company credit card debt currently in place at the Closing Date rather than requiring the loans and credit card to be paid in full prior to the Closing Date, the amount of SBA loans not to exceed $86,933.84 on the Closing Date and Company credit card debt not to exceed $41,104.56 on the Closing Date, the aggregate purchase price for the Shares shall be equal to the payments in accordance with this Section 1.02 (the "Purchase Price"):
(a) During the Payout Period, Seller shall be entitled to 10% of the Net Revenue actually earned by the Company during the Payout Period from the Company clients listed in Section 1.02(a) of the Disclosure Schedules, or from future clients of the Company, in either case if Seller meaningfully participates in securing the Net Revenue for the Company. In order to verify the calculation of Net Revenue, Seller shall have the right to audit and review the Company’s books and records during the Payout Period upon reasonable notice; provided, however, that Seller’s right to audit the Company’s books and records shall be limited to once a quarter.
(i) "Payout Period" means a period of 36 months starting from the Closing Date.
(ii) "Disclosure Schedules" means the disclosure schedules delivered by Seller concurrently with the execution, closing, and delivery of this Agreement.
(iii) "Net Revenue" as used in subparagraph (a) means gross revenues actually collected by the Company under the applicable service agreement, less any costs, fees, taxes, or other expenses incurred by the Company related to the service agreement. "Net Revenue" shall not include any income, taxes, or other expenses reimbursed to the Company. "Net Revenue" shall not include any salaries, compensation, benefits or other forms of compensation or perquisites provided by the Company to any of its officers, directors, or shareholders. For the avoidance of doubt, "Net Revenue" shall include any salaries, compensation, benefits or other forms of compensation or perquisites provided by the Company to its employees.
(iv) Any dispute over the definition of Net Revenue or whether the Seller "meaningfully participates" in delivering the Net Revenue to the Company shall be decided by the Company in its sole discretion.
(b) The Company shall pay Seller its revenue share on a quarterly basis, within 30 days following the close of each calendar quarter during the applicable payout periods. Each payment to Seller shall be accompanied by a written statement signed by Buyer showing the
method and the specific dollar figures used by Buyer to calculate the amount of the Net Revenue and the Seller’s payment amount for that period.
As previously reported by LBREPORT.com, at midevening Oct. 6, LBREPORT.com emailed Ms. Allen inviting comment/statement for publication re the civil action. Our invitation also noted that although the civil action relates to a business transaction, Ms. Allen might wish to comment on to what extent, if at all, it's fair for 2nd district voters to consider the complaint's allegations in connection with Ms. Allen seeking to represent LB's 2nd Council district. A response to our invitation from Ms. Allen is pending.
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Schedule 1.02(a) shows an "Existing Client List" and "Previous Client List" below:
Existing Client List
Current Clients
Popic
2nd and PCH
Jameson Group
LA County Fire
San Bernardino County Employees
CRATE Modual
Bernal Capitol Group
Calyx Peak Capital (All Brands)
City of Long Beach
City of Long Beach Office of Mayor Robert
DR Horton (Southern California)
Long Beach Economic & Property Development
City of Encinitas
Ensemble Investments, LLC
Hotel Maya
John M Edmond (Mercury)
LBCC Foundation
LBCREC
LBS Financial Credit Union
Les Schwab Tire Company
Long Beach Health & Human Services
Long Beach Transit
Metro (contract expected to start in November)
Office of the City Auditor (Long Beach)
Orange County Transportation Authority: “Public Communications Outreach Interstate improvement
Project” (just landed as a sub and will start in Sept)
Riverside Public Utilities
San Bernardino County Employees Retirement Association
Senator Lena Gonzalez
West Valley Water District
Western Municipal Water District
White, Day, Rice Mortuary
Previous Clients:
2H Construction
360 Krav Maga
7th District Council Office
Alegria LBP
Alpine Mortgage Planning
Anastasi Development Co., LLC
Autism Spectrum Therapies
Bacchus Wine Consultants
Bobbie Seegers
Broadway Property Company
Brookfield Southland
Cahuilla Casino
Calyx Peak Capital
Cardio Barre
Cerr Clg
Children Today
Chris Glew
Circle AUDI
Circle Porsche Long Beach
City of LB
City of Long Beach Office of Mayor Robert
City Ventures
Citywide Escrow
CoLB City Clerk
CoLB ESB
Color Me LB
Complexions Day Spa
Convention Visitors Bureau
COOKING.COM
Councilwoman Suzie Price
CT Realty Corporation
Creekside
Total CT Realty Corporation
CVB-LP
Denso
DLBA
DOMA PROPERTIES
DOMA Properties/Resale Division
DOMA- Rick Lobo
DOMA-Mike Dunfee
DOMA-Steven Nottingham
Total DOMA Properties/Resale Division
Downtown Long Beach Associates
DR Horton IE
DR Horton VEN
EASBA
Economic & Property Development
Edgemoor Development
Encinitas
Energy Club
Ensemble Investments, LLC
Eye Physicians of Long Beach
Farmers & Merchants Bank
Farmers & Merchants Bank Trust Company
Fletcher Development Company
Friedmans Appliance Center
Friends of Belmont Shore
FUHU
Genesis Real Estate Group
323 Tahoe
DocuSign Envelope ID: 80E4730C-54EE-4DE8-96D3-FCE0F7F879C5
Aqua
Total Genesis Real Estate Group
GH Palmer Associates
GPF
Green Zahn & Associates
HABRI Central, Purdue University
Home Services Relocation
Hotel Maya
ICT
INCO Company
International City Bank
International City Theatre
Irvine Company Apartment Communities
Jacobs
John Kadvany
John M Edmond
Julie McAvoy
Kelly's Restaurant
LB Arts Council
LB Camerata
LB Water
LBCC Foundation
LBCREC
LBEA
LBLGP
LBS Financial Credit Union
LBTV
Lee Andrews Group, Inc.
Les Schwab
Little Sheep International
Live Fit. Apparel, LLC
LLB
Long Beach Airport
Long Beach Area Chamber of Commerce
Long Beach City
Long Beach City College
Long Beach Community Foundation
Long Beach Community Hospital
Long Beach Health & Human Services
Long Beach Symphony Orchestra
Long Beach Transit
Long Beach Water Department
Lyon Communities
1900 Ocean
Gallery 421
Levanto
Ocean Club
St. Claire Apartment Community
The Lofts
Total Lyon Communities
Measure I - Infrastructure Bond
Memorial (MMCF)
Meruelo Group, LLC
Mesa Water District
Milana's Pizzeria
Millworks & Antioch Press Release
MJW Investments
Santee Village
Total MJW Investments
MP
Music Tastes Good
NAACP
NBC Universal
Newport Beach Police Dept.
Nodal Seismic
Novelle Financial Service, Inc
Office of Mayor Robert Garcia
Office of the Auditor
p2 Entertainment Group
Pasadena Fire Department
Professional Fighters League
Pilates Plus
PizzaRev
Planned Parenthood
PoLB
Police Department
Port of Long Beach
Prospect Mortgage
Proterra
Public Works
Queen Mary
Rancho California Water District
RebuildLB
Redlands
Riverside Public Utilities
Robert Garcia for Mayor
Rotary of Long Beach
Rowland Water
San Bernardino County Employees Retirement Association
San Bernardino Water
Sea Cargo, Inc
Security Solutions
SHP
Signal Hill Petroleum
Smart & Final Stores, LLC.
South Coast Shingle
Southland Motor Car Dealers Association
Special Olympics Southern California
Speedpro Imaging - Wraps
Sportsheets International
St. Nick's
STADIUM LOFTS
DocuSign Envelope ID: 80E4730C-54EE-4DE8-96D3-FCE0F7F879C5
Sunset Printing
Susan G. Komen
Suzie Price for Long Beach City Council
TABC Assets & Services
The Ambassador Program
Thomas Safran & Associates
Tokotak Ashcraft
Toolman4u, Inc.
UDR
Lumiere
Pine @ Sixth
Total UDR
UPS
Urban Community
VDS/CS
We Love LB
Wells Fargo Home Mortgage
West Valley Water District
Western Municipal Water District
White, Day, Rice Mortuary
YVWD
Zamboo
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Support really independent news in Long Beach. No one in LBREPORT.com's ownership, reporting or editorial decision-making has ties to development interests, advocacy groups or other special interests; or is seeking or receiving benefits of City development-related decisions; or holds a City Hall appointive position; or has contributed sums to political campaigns for Long Beach incumbents or challengers. LBREPORT.com isn't part of an out of town corporate cluster and no one its ownership, editorial or publishing decisionmaking has been part of the governing board of any City government body or other entity on whose policies we report. LBREPORT.com is reader and advertiser supported. You can help keep really independent news in LB similar to the way people support NPR and PBS stations. We're not non-profit so it's not tax deductible but $49.95 (less than an annual dollar a week) helps keep us online.
