+ Council Candidate Allen Declines to Answer, Abruptly Ends/Exits Alamitos Beach Neighborhood Ass'n 2nd Dist. Debate When Asked If She Acknowledges Or Disputes That Her ETA Sale Agreement Creates Potential Conflicts By Entitling Her To Three Years 10% Of Firm's Net Revenue
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Council Candidate Allen Declines To Answer, Abruptly Ends/Exits Alamitos Beach Neighborhood Ass'n 2nd Dist. Debate When Asked If She Acknowledges Or Disputes That Her ETA Sale Agreement Creates Potential Conflicts By Entitling Her To Three Years 10% Of Firm's Net Revenue



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(Oct. 10, 2020, 5:55 a.m.) -- Second district City Council candidate Cindy Allen declined to answer and abruptly exited an Oct. 8 Zoomed election debate presented by the Alamitos Beach Neighborhood Ass'n when asked if she acknowledges or disputes that if elected, her ETA sale agreement creates potential conflicts by entitling her to 10% of the firm's net revenue under certain terms for the next three years.

A few seconds after the moderator mentioned ETA (her recently-sold firm) Ms. Allen interrupted and indicated she wouldn't respond to the question. At one point she labeled it an "attack question." Ms. Allen thanked ALBA for the debate opportunity, announced she was leaving and disconnected electronically from the Zoomed event.

A third party has webposted a video clip of the exchange at this link..

Ms. Allen's exit left her runoff opponent, Reform Ticket candidate Robert Fox, to field viewer questions for the final roughly half hour of the event..

The question was emailed to ABNA (whose Facebook page invited emailed public questions) by LBREPORT.com at 5:27 p.m. on Oct. 8. As submitted: the question was: "Directed to Ms. Allen: Do you acknowledge or dispute that if you're elected, receiving 10% of ETA's net revenues for three years would create potential conflicts between your business interest and your elective offfice?"

The question didn't ask about allegations in a 10 page civil lawsuit brought by ETA's buyers (LBREPORT.com coverage here); it inquired about the ETA sale agreement that Ms. Allen signed in July 2020 whose provisions became public as an attached exhibit to the lawsuit.

LBREPORT.com publisher Bill Pearl [author of this article] voiced surprise and disappointment at Ms. Allen's response. "Long Beach is a major California city and no candidate seeking elective office here should expect some privilege to avoid answering media questions about how their private business interests might affect their public duties," Mr. Pearl said. "We invite and urge Ms. Allen to answer the question,"

As of dawn Oct. 10, to our knowledge only two LB news outlets -- LBREPORT.com and the Beachcomber -- have told their readers that the July 2020 ETA sale agreement contains a provision entitling Ms. Allen (currently seeking a four year term on the City Council) to 10% to ETA's net revenue on certain terms for three years.

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The ETA sale agreement provides in pertinent part:

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"):
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(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 Companyís books and records during the Payout Period upon reasonable notice; provided, however, that Sellerís right to audit the Companyís 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 Sellerís payment amount for that period.

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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.


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