HomeMy WebLinkAboutPRE 2021-0008; 3060 STATE STREET; Preliminary Review (PRE)UOCU~IQFl. t:iiveiope IU: ~lt:/ At:iJl:l•t:41 t:l-4t:~·t:11"4t:.•1" 1:l,I"' A-'1" 1 UUl"'U-'
(city of
Carlsbad
Community Development
Pl annlng Division
P'RELIMINARV REVIEW
REQUEST FORM PLN6
1635 Faraday Avenue
(760) 602-4610
www.carlsbadca.gov P-14
PROJECT NAME: 3060 State Street
Assessor's Parcel Nurnber(s): 203-297-05-00
Description of proposal (add attachment If necessary):
Conversion of existing commercial buildings (863 SF and 310 SF) to restaurant use. Total of 1,173 SF. Added outdoor patio
area to be less than indoor seating area. Valuation of exterior improvements shall be less than $60,000. Addition of
2 standard and 1 accessible parking stalls to be accessed from alley.
Would you like to orally present your proposal to your assigned staff planner/engineer? Yes LJ No l.!J
Please list the staff members you have previously spoken to regarding this project. Please state "N/A" if not.
N/A
FOCUS AREA(S): 0 Site Design [!] Land Us.e O Architecture [!] Zoning Interpretations 0 Engineering Standards O Other
OWNER NAME (Print): APPLICANT NAME (Print):
JVK FMK Venture I, lLC. -Vic Gausepohl / Kirk Allison Kirk Moeller, Kirk Moeller Architects, Inc.
MAILING ADDRESS: MAILING ADDRESS:
2888 Loker Ave E, Suite 220
CITY, STATE, ZIP: CITY, STATE, ZIP:
Carlsbad, CA 92010
TELEPHONE: TELEPHONE:
619-227-2892, 760-521-7501 760-814-8128
EMAIL ADDRESS: EMAIL ADDRESS:
vic.gausepohl@compacprops.com, kirk.allison@compacprops.c kirk@kmarchitectsinc.com
I CERTIFY THAT I AM THE LEGAL OWNER AND THAT ALL THE I CERTIFY THAT I AM THE LEGAL REPRESENTATIVE OF THE
ABOVE INFORMATION IS TRUE AND CORRECT TO THE BEST OF MY OWNER AND THAT ALL THE ABOVE INFORMATION IS TRUE
KNOWLEDGE. AND CORRECT TO THE BEST OF MY KNOWLEDGE.
~-~-~ ~-~ 3/23/2021
3/23/2021 ~~~-----DIiie: 2021.03.24 v4(: a,..,,~otL 09:03:23-07'00' 3/23/21 · rt. awSb!A,
~r(t3D3480. E17D8704326A49A ... DATE SIGNATURE D.ATE
*Owner's signature Indicates permission to conduct a preliminary
review for a development proposal.
CITY USE ONLY
Project Numberf Rf lo 2-1 _ 00 0 2? Development Number: DEV 2021-0052.
FEE REQUIRED/DATE FEE PAID:~ 114, 0 Q
RECEIVED BY: -f, tOWVvV ·-s/V-t / 2bJ.-I
u
P-14 Preliminary Review F:evised: 05/20
3060 State Street Preliminary Review
Questions for Planning:
1. We are Planning to perform minor cosmetic upgrades to the existing structures along with
minor site improvements. It is our understanding that if the construction valuation of exterior
improvements is under $60,000, we are able to process plans as a minor CDP/ SOP. Please
confirm.
2. We are proposing to convert the existing commercial use to restaurant use including indoor and
outdoor dining and the sale of alcoholic beverages. Please confirm that the conversion will not
trigger major permits if the construction valuation of exterior improvements remains under
$60,000.
3. Per Village Master Plan Table 2-4 Com,.ertlng Uses -"If the new use has a higher parking
requirement than the existing use, 50% of the additional parking based on the higher parking
requirement shall be provided" There is currently no parking on site. The existing commercial
space totals 1,173 SF. Our proposed restaurant use parking: totals 1,173 SF/170 = 6.9 x 50% =
3.45 spaces rounded down to 3 spaces. Please confirm.
4. We are proposing to install outdoor patio dining area that totals less square footage than the
indoor total dining area. Please confirm that this square footage will not trigger the need for
additional parking.
5. Please confirm that if all required permits are minor, then City staff will determine acceptance
of the Parking in-lieu fee request if additional parking is required due to increasing the outdoor
dining area beyond the same size as the interior dining area. Planning Commission or City
Council would not be involved.
6. we have heard that an ADA parking space with an access aisle served by electric vehicle supply
equipment is to be counted as two standard automobile parking spaces for the purpose of
complying with any applicable minimum parking requirements established by a local
jurisdiction. So, an ADA EV space counts both as an ADA space and as an EV space. Does this
mean if we install electric vehicle supply equipment, we hav•~ a total of 4 spaces not 3?
7. Cafe seating: Please confirm that we can potentially add cafe seating area west of the curb face
in front of the building, size and configuration subject to further discussion with the City; this
cafe seating will not have an onsite parking requirement.
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~
OPERATING AGREEMENT
FOR
JVK FMK VENTURE I, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
This Operating Agreement (this "Agreement"), is made as of August 4, 2020 by and among the
parties listed on the signature pages hereof ( collectively referred to as the "Members" or
individually as a "Member"), with reference to the following facts:
A. The Members have caused, or will cause, to be executed and filed Articles of
Organization (the "Articles") for JVK FMK Venture I, LLC (the "Company"), a limited liability
company, under the laws of the State of California, with the California Secretary of State.
NOW, THEREFORE, the Members by this Agreement set forth the operating agreement for the
Company upon the terms and subject to the conditions of this Agreement.
ARTICLE 1.
ORGANIZATIONAL MATTERS
1.01 Name. The name of the Company shall be "JVK FMK Venture I, LLC." The
Company may conduct business under that name or any other name approved by the Members.
1.02 Term. The term of the Company commenced as of the date of the filing of the
Articles and shall not terminate, unless terminated under Section 9.01.
1.03 Office and Agent. The Company shall continuously maintain an office and
registered agent in the State of California. The principal office of the Company shall be at 273 7
Vista del Rio, Fallbrook, California 92028 or such location as the Members may determine. The
registered agent shall be as stated in the Articles or as otherwise determined by the Members.
1.04 Business of the Company. Notwithstanding the purpose of the Company which is
described in the Articles, the Company shall not engage in any business other than the following
(the "Business") without the consent of all of the Members:
(a) Real estate acquisition, ownership, operation and disposition; and
(b) such other activities directly related to the foregoing business as may be
necessary or advisable in the reasonable opinion of the Members to further such business.
Page 1 of 16 Operating Agreement
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ARTICLE 2.
CAPITAL CONTRIBUTIONS
2.01 Capital Contributions. Each Member shall make a capital contribution to the
capital of the Company as shown opposite the Member's name on Exhibit A attached hereto.
Additional contributions to the capital of the Company shall be made only with the unanimous
consent of the Members. Except as provided in this Agreement, no Member may withdraw his
or her capital contribution.
2.02 Capital Accounts. The Company shall establish an individual capital account
("Capital Account") for each Member. The Company shall determine and maintain each Capital
Account in accordance with Treasury Regulations section l.704-l(b)(2)(iv). Upon a valid
transfer of a Member's interest in the Company ("Membership Interest") in accordance with
ARTICLE VI, such Member's Capital Account shall carry over to the new owner.
2.03 No Interest. The Company shall not pay any interest on capital contributions.
ARTICLE 3.
MEMBERS
3.01 Admission of Additional Members. Additional Members may be admitted with
the approval of all Members. Additional Members will participate in the management, "Net
Profits", "Net Losses" (as such terms are defined in Section 5.0l(e)), and distributions of the
Company on such terms as are determined by the Members. Exhibit A shall be amended upon
the admission of an additional Member to set forth such Member's name and capital contribution.
3.02 Withdrawals or Resignations. Any Member who is under an obligation to render
services to the Company may withdraw or resign as a Member at any time upon 120 days prior
written notice to the Company, without prejudice to the rights, if any, of the Company or the
other Members under any contract to which the withdrawing Member is a party. In the event of
such withdrawal, such Member's Membership Interest shall be terminated, such Member shall
thereafter only have the rights of a transferee as described in Section 6.03 and such Membership
Interest shall be subject to purchase and sale as provided in Section 7.02. No other Member may
withdraw, retire or resign from the Company.
3.03 Payments to Members. Except as specified in this Agreement or pursuant to a
transaction permitted by Section 4.06, no Member or person or entity controlled by, controlling
or under common control with the Member ( each such person or entity is defined as an
"Affiliate"), is entitled to remuneration for services rendered or goods provided to the Company.
However, the Company shall reimburse the Members and their Affiliates for organizational
expenses (including, without limitation, legal and accounting fees and costs) incurred to form the
Company, prepare the Articles and this Agreement and, as approved by the Members, for the
actual cost of goods and materials used by the Company.
Page 2 of 16 Operating Agreement
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ARTICLE 4.
MANAGEMENT AND CONTROL OF THE COMPANY
4.01 Management and Powers. In entering into this Agreement, the intent of each
Member is to actively engage in the management of the Company. Accordingly, unless
otherwise limited by the Articles or this Agreement, each Member shall have full, complete and
exclusive authority, power, and discretion to manage and control the business, property and
affairs of the Company, to make all decisions regarding those matters and to perform any and all
other acts or activities customary or incident to the management of the Company's business,
property and affairs.
4.02 Limitations on Power of Members. Notwithstanding any other provisions of this
Agreement, no debt or liability of more than $50,000 may be contracted on behalf of the
Company without the approval of all Members, and all Members are required to sign contracts
and obligations on behalf of the Company in excess of that amount. Additionally, no Member
shall have authority to cause the Company to engage in the following transactions without first
obtaining the approval of all Members:
(a) The sale, exchange or other disposition of all, or substantially all, of the
Company's assets occurring as part of a single transaction or plan, or in multiple transactions
over a 12 month period, except in the orderly liquidation and winding up of the business of the
Company upon its duly authorized dissolution.
(b) The merger of the Company with another limited liability company or
corporation, general partnership, limited partnership or other entity ( except that any act which
would cause a Member to incur personal liability for the obligations of the Company or its
successor shall also require the consent of such Member).
( c) An alteration of the authorized businesses of the Company as set forth in
Section 1.04.
(d)
of the Company.
(e)
Any act which would make it impossible to carry on the ordinary business
The confession of a judgment against the Company.
( f) Any other transaction described in this Agreement as requiring the
approval, consent or vote of the Members.
4.03 Member Approval. No annual or regular meetings of the Members are required to
be held. However, if such meetings are held, such meetings shall be noticed, held and conducted
pursuant to the Act. In any instance in which the approval of the Members is required under this
Agreement, such approval may be obtained in any manner permitted by the Act. Unless
otherwise provided in this Agreement, approval of the Members shall mean the approval of all
Members.
Page 3 of 16 Operating Agreement
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4.04 Devotion of Time. Except as set forth in Exhibit A, each Member shall devote
whatever time or effort as he or she deems appropriate for the furtherance of the Company's
business.
4.05 Competing Activities. The Members and their Affiliates may not engage or
invest in any activity that is or plans to be in direct competition with the Company.
4.06 Transactions between the Company and the Members. Notwithstanding that it
may constitute a conflict of interest, the Members and their Affiliates may engage in any
transaction with the Company so long as such transaction is not expressly prohibited by this
Agreement and so long as the terms and conditions of such transaction, on an overall basis, are
fair and reasonable to the Company and are at least as favorable to the Company as those that are
generally available from persons capable of similarly performing them or if the remaining
Members approve the transaction in writing.
ARTICLE 5.
ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS
5.01 Definitions. When used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, the provisions of succeeding law, and to the extent applicable, the Treasury
Regulations.
(b) "Company Minimum Gain" shall have the meaning ascribed to the term
"Partnership Minimum Gain" in the Treasury Regulations section l.704-2(d).
( c) "Member N onrecourse Debt" shall have the meaning ascribed to the term
"Partner Nonrecourse Debt" in Treasury Regulations section 1. 704-2(b )( 4).
( d) "Member N onrecourse Deductions" shall mean items of Company loss,
deduction, or Code Section 705(a)(2)(B) expenditures, which are attributable to Member
Nonrecourse Debt.
(e) "Net Profits" and "Net Losses" shall mean the income, gain, loss,
deductions, and credits of the Company in the aggregate or separately stated, as appropriate,
determined in accordance with the method of accounting at the close of each fiscal year
employed on the Company's information tax return filed for federal income tax purposes.
(f) "Nonrecourse Liability" shall have the meaning set forth in Treasury
Regulations section l.752-l(a)(2).
Page 4 of 16 Operating Agreement
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(g) "Treasury Regulations" shall mean the final or temporary regulations that
have been issued by the U.S. Department of Treasury pursuant to its authority under the Code,
and any successor regulations.
5.02 Allocations of Net Profit and Net Loss.
(a) Net Loss. Net Loss shall be allocated to the Members in proportion to
their Membership Interest. Notwithstanding the previous sentence, loss allocations to a Member
shall be made only to the extent that such loss allocations will not create a deficit Capital
Account balance for that Member in excess of an amount, if any, equal to such Member's share
of Company Minimum Gain that would be realized on a foreclosure of the Company's property.
Any loss not allocated to a Member because of the foregoing provision shall be allocated to the
other Members (to the extent the other Members are not limited in respect of the allocation of
losses under this Section 5.02). Any loss reallocated under this Section 5.02 shall be taken into
account in computing subsequent allocations of income and losses pursuant to this ARTICLE 5,
so that the net amount of any item so allocated and the income and losses allocated to each
Member pursuant to this ARTICLE 5, to the extent possible, shall be equal to the net amount that
would have been allocated to each such Member pursuant to this AR TI CLE 5 if no reallocation
oflosses had occurred under this Section 5.02.
(b) Net Profit. Net Profit shall be allocated to the Members in proportion to
their Membership Interests.
5.03 Special Allocations. Notwithstanding Section 5.02,
(a) Minimum Gain Chargeback. If there is a net decrease in Company
Minimum Gain during any fiscal year, each Member shall be specially allocated items of
Company income and gain for such fiscal year ( and, if necessary, in subsequent fiscal years) in
an amount equal to the portion of such Member's share of the net decrease in Company
Minimum Gain that is allocable to the disposition of Company property subject to a Nonrecourse
Liability, which share of such net decrease shall be determined in accordance with Treasury
Regulations section l.704-2(g)(2). Allocations pursuant to this Section 5.03(a) shall be made in
proportion to the amounts required to be allocated to each Member under this Section 5.03(a).
The items to be so allocated shall be determined in accordance with Treasury Regulations
Section l.704-2(t). This Section 5.03(a) is intended to comply with the minimum gain
chargeback requirement contained in Treasury Regulations section 1. 704-2(t) and shall be
interpreted consistently therewith.
(b) Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt.
If there is a net decrease in Company Minimum Gain attributable to a Member Nonrecourse
Debt, during any fiscal year, each member who has a share of the Company Minimum Gain
attributable to such Member Nonrecourse Debt (which share shall be determined in accordance
with Treasury Regulations section l.704-2(i)(5)) shall be specially allocated items of Company
income and gain for such fiscal year ( and, if necessary, in subsequent fiscal years) in an amount
equal to that portion of such Member's share of the net decrease in Company Minimum Gain
Page 5 of 16 Operating Agreement
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attributable to such MemberNonrecourse Debt that is allocable to the disposition of Company
property subject to such Member Nonrecourse Debt (which share of such net decrease shall be
determined in accordance with Treasury Regulations section l.704-2(i)(5)). Allocations
pursuant to this Section 5.03(b) shall be made in proportion to the amounts required to be
allocated to each Member under this Section 5.03(b). The items to be so allocated shall be
determined in accordance with Treasury Regulations section l.704-2(i)(4). This Section 5.03(b)
is intended to comply with the minimum gain chargeback requirement contained in Treasury
Regulations section 1. 704-2(i)( 4) and shall be interpreted consistently therewith.
(c) Nonrecourse Deductions. Any nonrecourse deductions (as defined in
Treasury Regulations section l.704-2(b)(l)) for any fiscal year or other period shall be specially
allocated to the Members in proportion to their Membership Interests.
(d) Member Nonrecourse Deductions. Those items of Company loss,
deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to Member
N onrecourse Debt for any fiscal year or other period shall be specially allocated to the Member
who bears the economic risk of loss with respect to the Member N onrecourse Debt to which such
items are attributable in accordance with Treasury Regulations section l.704-2(i).
( e) Qualified Income Offset. If a Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury Regulations section 1. 704-
1 (b )(2)(ii)( d)( 4 ), (5) or (6), or any other event creates a deficit balance in such Member's Capital
Account in excess of such Member's share of Company Minimum Gain, items of Company
income and gain shall be specially allocated to such Member in an amount and manner sufficient
to eliminate such excess deficit balance as quickly as possible. Any special allocations of items
of income and gain pursuant to this Section 5.03(e) shall be taken into account in computing
subsequent allocations of income and gain pursuant to this ARTICLE 5 so that the net amount of
any item so allocated and the income, gain, and losses allocated to each Member pursuant to this
Section 5.03(e) to the extent possible, shall be equal to the net amount that would have been
allocated to each such Member pursuant to the provisions of this AR TI CLE 5 if such unexpected
adjustments, allocations, or distributions had not occurred.
5.04 Code Section 704(c) Allocations. Notwithstanding any other provision in this
ARTICLE 5, in accordance with Code Section 704(c) and the Treasury Regulations promulgated
thereunder, income, gain, loss, and deduction with respect to any property contributed to the
capital of the Company shall, solely for tax purposes, be allocated among the Members so as to
take account of any variation between the adjusted basis of such property to the Company for
federal income tax purposes and its fair market value on the date of contribution. Allocations
pursuant to this Section 5.04 are solely for purposes of federal, state and local taxes. As such,
they shall not affect or in any way be taken into account in computing a Member's Capital
Account or share of profits, losses, or other items of distributions pursuant to any provision of
this Agreement.
5.05 Distribution of Assets by the Company. Subject to applicable law and any
limitations contained elsewhere in this Agreement, the Company shall make monthly
Page 6 of 16 Operating Agreement
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distributions to the Members. Distributions shall be to the Members in proportion to their
Membership Interests.
ARTICLE 6.
TRANSFER AND ASSIGNMENT OF INTERESTS
6.01 Transfer and Assignment of Interests. No Member shall transfer, assign, convey,
sell, encumber or in any way alienate all or any part of his or her Membership Interest
(collectively, "transfer") except with the prior approval of all Members, which approval may be
given or withheld in the sole discretion of the Members.
6.02 Substitution of Members. A transferee of a Membership Interest shall have the
right to become a substitute Member only if (i) consent of the Members is given in accordance
with Section 6.01, (ii) such person executes an instrument satisfactory to the Members accepting
and adopting the terms and provisions of this Agreement, and (iii) such person pays any
reasonable expenses in connection with his or her admission as a new Member. The admission
of a substitute Member shall not release the Member who assigned the Membership Interest from
any liability that such Member may have to the Company.
6.03 Transfers in Violation of this Agreement and Transfers of Partial Membership
Interests. Upon a transfer in violation of this ARTICLE 6, the transferee shall have no right to
vote or participate in the management of the Company or to exercise any rights of a Member.
Such transferee shall only be entitled to receive the share of the Company's Net Profits, Net
Losses and distributions of the Company's assets to which the transferor would otherwise be
entitled. Notwithstanding the immediately preceding sentences, if, in the determination of the
remaining Members, a transfer in violation of this ARTICLE 6 would cause the termination of
the Company under the Code, in the sole discretion of the remaining Members, the transfer shall
be null and void.
ARTICLE 7.
CONSEQUENCES OF DISSOLUTION EVENTS AND TERMINATION OF
MEMBERSHIP INTEREST
7.01 Dissolution Event. Upon the occurrence of the death, withdrawal, resignation,
retirement, insanity, bankruptcy or dissolution of any Member ("Dissolution Event"), the
Company shall dissolve unless all of the remaining Members ("Remaining Members") consent
within ninety (90) days of the Dissolution Event to the continuation of the business of the
Company. If the Remaining Members so consent, the Company and/or the Remaining Members
shall have the right to purchase, and if such right is exercised, the Member ( or his or her legal
representative) whose actions or conduct resulted in the Dissolution Event ("Former Member")
shall sell, the Former Member's Membership Interest ("Former Member's Interest") as provided
in this ARTICLE 7.
7.02 Withdrawal. Notwithstanding Section 7.01, upon the withdrawal by a Member in
accordance with Section 3.02 such Member shall be treated as a Former Member, and, unless the
Page 7 of 16 Operating Agreement
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Company dissolves as a result of such withdrawal, the Company and/or the Remaining Members
shall have the right to purchase, and if such right is exercised, the Former Member shall sell, the
Former Member's Interest as provided in this ARTICLE 7.
7.03 Purchase Price. The purchase price for the Former Member's Interest shall be the
fair market value of the Former Member's Interest as determined by an independent appraiser
jointly selected by the Former Member and by Remaining Members holding a majority of the
remaining Membership Interests. The Company and the Former Member shall each pay one-half
of the cost of the appraisal. Notwithstanding the foregoing, if the Dissolution Event results from
a breach of this Agreement by the Former Member, the purchase price shall be reduced by an
amount equal to the damages suffered by the Company or the Remaining Members as a result of
such breach.
7.04 Notice of Intent to Purchase. Within thirty (30) days after the fair market value of
the Former Member's Interest has been determined in accordance with Section 7.03, each
Remaining Member shall notify the Members in writing of his or her desire to purchase a portion
of the Former Member's Interest. The failure of any Remaining Member to submit a notice
within the applicable period shall constitute an election on the part of the Member not to
purchase any of the Former Member's Interest. Each Remaining Member so electing to
purchase shall be entitled to purchase a portion of the Former Member's Interest in the same
proportion that the Membership Interest of the Remaining Member bears to the aggregate of the
Membership Interests of all of the Remaining Members electing to purchase the Former
Member's Interest.
7.05 Election to Purchase Less Than All of the Former Member's Interest. If any
Remaining Member elects to purchase none or less than all of his or her pro rata share of the
Former Member's Interest, then the Remaining Members can elect to purchase more than their
pro rata share. If the Remaining Members fail to purchase the entire interest of the Former
Member, the Company may purchase any remaining share of the Former Member's Interest.
7.06 Payment of Purchase Price. The Company or the Remaining Members, as the
case may be, shall pay at the closing one-fifth (1/5) of the purchase price and the balance of the
purchase price shall be paid in four equal annual principal installments, plus accrued interest, and
be payable each year on the anniversary date of the closing. The unpaid principal balance shall
accrue interest at the current applicable federal rate as provided in the Code for the month in
which the initial payment is made, but the Company and the Remaining Members shall have the
right to prepay in full or in part at any time without penalty. The obligation of each purchasing
Remaining Member, and the Company, as applicable, to pay its portion of the balance due shall
be evidenced by a separate promissory note executed by the respective purchasing Remaining
Member or the Company, as applicable. Each such promissory note shall be in an original
principal amount equal to the portion owed by the respective purchasing Remaining Member or
the Company, as applicable. The promissory note executed by each purchasing Remaining
Member shall be secured by a pledge of that portion of the Former Member's Interest purchased
by such Remaining Member.
Page 8 of 16 Operating Agreement
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7.07 Closing of Purchase of Former Member's Interest. The closing for the sale of a
Former Member's Interest pursuant to this ARTICLE 7 shall be held at 10:00 a.m. at the
principal office of Company no later than sixty (60) days after the determination of the purchase
price, except that if the closing date falls on a Saturday, Sunday, or California legal holiday, then
the closing shall be held on the next succeeding business day. At the closing, the Former
Member shall deliver to the Company or the Remaining Members an instrument of transfer
(containing warranties of title and no encumbrances) conveying the Former Member's Interest.
The Former Member, the Company and the Remaining Members shall do all things and execute
and deliver all papers as may be reasonably necessary fully to consummate such sale and
purchase in accordance with the terms and provisions of this Agreement.
7.08 Deadlock between the Members. Should the Members become deadlocked-
unable to make an unanimous decision or to take unanimous action as required elsewhere in this
Agreement-for a period lasting more than 30 days, the Company shall dissolve unless all
Members unanimously agree that one or more Members shall have the right to purchase the
Membership Interests of the other Members and to continue the business of the Company under
the provisions outlined in ARTICLE 6. If such unanimous consent cannot be reached or is not
desired, the Company shall dissolve and wind up as provided for in ARTICLE 7.
ARTICLE 8.
ACCOUNTING, RECORDS, REPORTING BY MEMBERS
8.01 Books and Records. The books and records of the Company shall be kept in
accordance with the accounting methods followed for federal income tax purposes. The
Company shall maintain at its principal office in California all of the following:
(a) A current list of the full name and last known business or residence
address of each Member set forth in alphabetical order, together with the capital contributions,
capital account and Membership Interest of each Member;
(b) A copy of the Articles and any and all amendments thereto together with
executed copies of any powers of attorney pursuant to which the Articles or any amendments
thereto have been executed;
( c) Copies of the Company's federal, state, and local income tax or
information returns and reports, if any, for the six (6) most recent taxable years;
( d) A copy of this Agreement and any and all amendments thereto together
with executed copies of any powers of attorney pursuant to which this Agreement or any
amendments thereto have been executed;
(e) Copies of the financial statements of the Company, if any, for the six (6)
most recent fiscal years; and
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(f) The Company's books and records as they relate to the internal affairs of
the Company for at least the current and past four ( 4) fiscal years.
8.02 Reports. The Company shall cause to be filed, in accordance with the Act, all
reports and documents required to be filed with any governmental agency. The Company shall
cause to be prepared at least annually information concerning the Company's operations
necessary for the completion of the Members' federal and state income tax returns. The
Company shall send or cause to be sent to each Member within ninety (90) days after the end of
each taxable year (i) such information as is necessary to complete the Members' federal and state
income tax or information returns and (ii) a copy of the Company's federal, state, and local
income tax or information returns for the year.
8.03 Bank Accounts. The Members shall maintain the funds of the Company in one or
more separate bank accounts in the name of the Company, and shall not permit the funds of the
Company to be commingled in any fashion with the funds of any other person. Any Member,
acting alone, is authorized to endorse checks, drafts, and other evidences of indebtedness made
payable to the order of the Company, but only for the purpose of deposit into the Company's
accounts. All checks, drafts, and other instruments obligating the Company to pay money in an
amount ofless than $10,000 may be signed by any one Member, acting alone.
8.04 Tax Matters for the Company. Members will designate a "Tax Matters Partner"
(as defined in Code Section 6231), to represent the Company (at the Company's expense) in
connection with all examination of the Company's affairs by tax authorities and to expend
Company funds for professional services and costs associated therewith.
ARTICLE 9.
DISSOLUTION AND WINDING UP
9.01 Conditions of Dissolution. The Company shall dissolve upon the occurrence of
any of the following events:
(a) Upon the happening of any event of dissolution specified in the Articles;
(b) Upon the entry of a decree of judicial dissolution pursuant to Section
17351 of the Corporations Code;
( c) Upon the vote of all Members;
( d) The occurrence of a Dissolution Event and the failure of the Remaining
Members to consent in accordance with Section 7.01 to continue the business of the Company
within ninety (90) days after the occurrence of such event; or
( e) The sale of all or substantially all of the assets of Company.
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9.02 Winding Up. Upon the dissolution of the Company, the Company's assets shall
be disposed of and its affairs wound up. The Company shall give written notice of the
commencement of the dissolution to all of its known creditors.
9.03 Order of Payment of Liabilities upon Dissolution. After determining that all the
known debts and liabilities of the Company have been paid or adequately provided for, the
remaining assets shall be distributed to the Members in accordance with their positive capital
account balances, after taking into account income and loss allocations for the Company's
taxable year during which liquidation occurs.
9.04 Limitations on Payments Made in Dissolution. Except as otherwise specifically
provided in this Agreement, each Member shall be entitled to look only to the assets of the
Company for the return of his or her positive Capital Account balance and shall have no recourse
for his or her Capital Contribution and/or share of Net Profits against any other Member except
as provided in this Agreement.
9.05 Certificates. The Company shall file with the California Secretary of State a
Certificate of Dissolution upon the dissolution of the Company and a Certificate of Cancellation
upon the completion of the winding up of the Company's affairs.
ARTICLE 10.
INDEMNIFICATION
10.01 Indemnification of Agents. The Company shall indemnify any Member and may
indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by reason of the fact that he or she is or was a
Member, officer, employee or other agent of the Company or that, being or having been such a
Member, officer, employee or agent, he or she is or was serving at the request of the Company as
a manager, director, officer, employee or other agent of another limited liability company,
corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to
hereinafter as an "agent"), to the fullest extent permitted by applicable law in effect on the date
hereof and to such greater extent as applicable law may hereafter from time to time permit.
ARTICLE 11.
INVESTMENT REPRESENTATIONS
Each Member hereby represents and warrants to, and agrees with, the Members and the
Company as follows:
11.01 Preexisting Relationship or Experience. He or she has a preexisting personal or
business relationship with the Company or one or more of its officers or controlling persons, or
by reason of his or her business or financial experience, or by reason of the business or financial
experience of his or her financial advisor who is unaffiliated with and who is not compensated,
directly or indirectly, by the Company or any affiliate or selling agent of the Company, he or she
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is capable of evaluating the risks and merits of an investment in the Company and of protecting
his or her own interests in connection with this investment.
11.02 No Advertising. He or she has not seen, received, been presented with, or been
solicited by any leaflet, public promotional meeting, article or any other form of advertising or
general solicitation with respect to the sale of the Membership Interest.
11.03 Investment Intent. He or she is acquiring the Membership Interest for investment
purposes for his or her own account only and not with a view to or for sale in connection with
any distribution of all or any part of the Membership Interest. No other person will have any
direct or indirect beneficial interest in or right to the Membership Interest.
ARTICLE 12.
MISCELLANEOUS
12.01 Counsel to the Company. Counsel to the Company may also be counsel to any
Member or any Affiliate of a Member. The Members may execute on behalf of the Company
and the Members any consent to the representation of the Company that counsel may request
pursuant to the California Rules of Professional Conduct or similar rules in any other jurisdiction
("Rules"). The Company has initially selected Erick R. Altona, Esq. of Lounsbery Ferguson
Altona & Peak ("Company Counsel") as legal counsel to the Company. Notwithstanding any
adversity that may develop, in the event any dispute or controversy arises between any Members
and the Company, then each Member agrees that Company Counsel may represent either the
Company or such Member in any such dispute or controversy to the extent permitted by the
Rules, and each Member hereby consents to such representation.
12.02 Complete Agreement. This Agreement and the Articles constitute the complete
and exclusive statement of agreement among the Members with respect to the subject matter
herein and therein and replace and supersede all prior written and oral agreements among the
Members. To the extent that any provision of the Articles conflict with any provision of this
Agreement, the Articles shall control.
12.03 Binding Effect. Subject to the provisions of this Agreement relating to
transferability, this Agreement will be binding upon and inure to the benefit of the Members, and
their respective successors and assigns.
12.04 Interpretation. All pronouns shall be deemed to refer to the masculine, feminine,
or neuter, singular or plural, as the context in which they are used may require. All headings
herein are inserted only for convenience and ease of reference and are not to be considered in the
interpretation of any provision of this Agreement. Numbered or lettered articles, sections and
subsections herein contained refer to articles, sections and subsections of this Agreement unless
otherwise expressly stated. In the event any claim is made by any Member relating to any
conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or
persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular Member or his or her counsel.
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12.05 Jurisdiction. Each Member hereby consents to the exclusive jurisdiction of the
state and federal courts sitting in California in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this Agreement. Each
Member further agrees that personal jurisdiction over him or her may be effected by service of
process by registered or certified mail addressed as provided in Section 12.09 of this Agreement,
and that when so made shall be as if served upon him or her personally within the State of
California.
12.06 Alternative Dispute Resolution ("ADR"). Except as otherwise provided in this
Agreement, any controversy or dispute arising out of this Agreement, shall be resolved in
accordance with the procedures provided in this Paragraph 12.06 ("ADR").
12.07 Situs. Any dispute subject to ADR pursuant to Paragraph 12.06 ("ADR Dispute")
shall be settled or determined by direct negotiation, mediation in the County of San Diego,
California, in the following manner:
(a) Direct Negotiation. In the event that any Member reasonably determines
that an ADR Dispute exists, such Member shall promptly notify the other Members in writing as
to the general nature of the ADR Dispute and as to dates and time within the following twenty
(20) days that such Member's authorized representatives are available to discuss settlement (the
"ADR Notice"). Within twenty (20) days of delivery of the ADR Notice, the Members shall
meet and negotiate in a good faith attempt to settle the ADR Dispute.
(b) Mediation. In the event that the Members are unable to settle the ADR
Dispute, within ten (10) days after such meeting, the Member shall select a mediator from the list
of approved mediators maintained by the Superior Court for San Diego County or such other
mediator as the Members may agree. The Members shall cooperate with such mediator to
schedule mediation at the earliest feasible date and shall comply with any reasonable conditions
imposed on such mediation by the mediator. The mediator's fee shall be divided equally among
the Members.
( c) Litigation. In the event that the Members fail to resolve the dispute
through mediation within thirty (30) days after it is submitted to the mediator, a Member may
file suit in the Superior Court of the State of California, San Diego County, for resolution of the
dispute.
12.08 Severability. If any provision of this Agreement or the application of such
provision to any person or circumstance shall be held invalid, the remainder of this Agreement or
the application of such provision to persons or circumstances other than those to which it is held
invalid shall not be affected thereby.
12.09 Notices. Any notice to be given or to be served upon the Company or any party
hereto in connection with this Agreement must be in writing (which may include facsimile) and
will be deemed to have been given and received when delivered to the address specified by the
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party to receive the notice. Such notices will be given to a Member at the address specified in
Exhibit A hereto. Any party may, at any time by giving five (5) days' prior written notice to the
other Members, designate any other address in substitution of the foregoing address to which
such notice will be given.
12.10 Amendments. All amendments to this Agreement will be in writing and signed
by all of the Members.
12.11 Multiple Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall constitute one and
the same instrument.
12.12 Attorney Fees. In the event that any dispute between the Company and the
Members or among the Members should result in litigation or arbitration, the prevailing party in
such dispute shall be entitled to recover from the other party all reasonable fees, costs and
expenses of enforcing any right of the prevailing party, including, without limitation, reasonable
attorneys' fees and expenses, all of which shall be deemed to have accrued upon the
commencement of such action and shall be paid whether or not such action is prosecuted to
judgment. Any judgment or order entered in such action shall contain a specific provision
providing for the recovery of attorney fees and costs incurred in enforcing such judgment and an
award of prejudgment interest from the date of the breach at the maximum rate allowed by law.
For the purposes of this Section: (a) attorney fees shall include, without limitation, fees incurred
in the following: (1) postjudgment motions; (2) contempt proceedings; (3) garnishment, levy,
and debtor and third party examinations; (4) discovery; and (5) bankruptcy litigation; and (b)
prevailing party shall mean the party who is determined in the proceeding to have prevailed or
who prevails by dismissal, default or otherwise.
12.13 Remedies Cumulative. The remedies under this Agreement are cumulative and
shall not exclude any other remedies to which any person may be lawfully entitled.
12.14 Consent of Spouse. Within ten (10) days after any individual becomes a Member
or a Member marries, such Member shall have his or her spouse execute a consent substantially
in the form attached to this Agreement.
IN WITNESS WHEREOF, all of the Members of JVK FMK VENTURE I, LLC, a California
Limited Liability Company, have executed this Agreement, effective as of the date written
above.
MEMBERS:
DocuSlgned by:
bvt. 1111.iSl>lA,
i&l~2~eALLISON
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DocuSlgned by:
~a~
o\t~~WSEPOHL
DocuSlgned by:
,,,,,_.., a/ti-.,,
dMJ.4i.Rm.iALLISON
Exhibits:
,. .......
Exhibit A Capital Contributions, Addresses and Membership Interests
{Consent of Spouses on following page J
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CONSENT OF SPOUSES
The undersigned spouses of the signatories to the foregoing Agreement each
acknowledge on her own behalf that: I have read the foregoing Agreement and I know its
contents. I am aware that by its provision my spouse grants the Company and/or the other
Members an option to purchase all of his Membership Interest ( or the Membership Interest of the
entity on whose behalf he has signed the Agreement), including my community interest (if any)
in it. I hereby consent to the sale, approve of the provisions of the Agreement, and agree that
such Membership Interest and my interest in it are subject to the provisions of the Agreement
and that I will take no action at any time to hinder operation of the Agreement on such
Membership Interest or my interest in it.
GDocuSlgned by:
,,,,, --attw,,,.,,,
DocuSlgned by:
k,&~st.~t ;E~G~USEPOHL
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EXHIBIT A
CAPITAL CONTRIBUTIONS, ADDRESSES AND MEMBERSHIP INTERESTS
Member Capital Contribution Membership Interest
Vic Gausepohl $1,250 25%
635 Cole Ranch Road,
Encinitas, CA 92024
Kathryn Gausepohl $1.250
635 Cole Ranch Road, 25%
Encinitas, CA 92024
Kirk D. Allison $1,250 25%
2737 Vista del Rio
Fallbrook, CA 92028
Marie Allison $1,250
2737 Vista del Rio 25%
Fallbrook, CA 92028
Total 100%
Exhibit A Operating Agreement