| Company | Guesthouse Bakari, LLC, a Delaware limited liability company (the "Company") |
| Business | Artisan bakery and café operations, initially at Guesthouse Pantry (10382 Donner Pass Road, Truckee, CA), with expansion rights to future Guesthouse campus locations |
| Parent Entity | GuestHouse Hospitality Company, a Delaware corporation ("GHC") |
Total Capital Required: $275,000
| Use of Funds | Amount | % |
|---|---|---|
| Bakery buildout allocation (25% of Titus construction) | $198,000 | 72% |
| Equipment (ovens, mixers, display cases, POS) | $42,000 | 15% |
| Working capital (inventory, pre-opening costs) | $35,000 | 13% |
| TOTAL | $275,000 | 100% |
The parties intend to reach the following fully-subscribed ownership structure:
| Member Class | Target % | Notes |
|---|---|---|
| GuestHouse Hospitality Company | 50% + 1 unit | Majority control |
| Agust Einthorsson (Co-Founder) | Up to 33% | See Section 4 |
| Employee Pool / Other Investors | ~17% | Includes Finnur |
Agust may earn up to 33% ownership through a combination of founding equity, capital raising bonuses, and direct investment:
| Grant | 10% founding interest, issued at formation |
| Consideration | (a) Concept origination and development of the Icelandic-inspired bakery model; (b) Strategic advisory services; (c) Commitment to quarterly operational oversight; (d) Assistance with future location expansion |
| Vesting | 4-year vesting with 1-year cliff. 25% vests at 12 months, remainder vests quarterly over 36 months. Full acceleration upon change of control. |
Agust earns additional equity for introducing and closing outside capital investment:
| Capital Raised | Bonus | Cumulative | Total w/ Base |
|---|---|---|---|
| $25,000 – $49,999 | 3% | 3% | 13% |
| $50,000 – $99,999 | +3% | 6% | 16% |
| $100,000 – $149,999 | +3% | 9% | 19% |
| $150,000+ | +4% | 13% | 23% |
Capital bonus equity vests immediately upon funding. "Introduced capital" means investment from parties not previously known to GHC, where Agust made the primary introduction.
| Option Grant | Agust has the right, but not the obligation, to purchase up to 10% additional equity in the Company |
| Strike Price | Fair Market Value at time of formation ($275,000 valuation = $27,500 for 10%) |
| Exercise Period | Option exercisable in whole or in part at any time during the 24 months following Company formation |
| Payment Terms | Cash at exercise, or installment payments over 12 months with interest at AFR, secured by the purchased units |
| Pro Rata Rights | If Agust exercises the full option, he receives pro rata rights to participate in future financing rounds to maintain his percentage ownership |
| Component | Equity | Running Total |
|---|---|---|
| Founding equity (concept + advisory) | 10% | 10% |
| Capital raising bonus (if $150K+ raised) | 13% | 23% |
| Equity purchase option (full exercise) | 10% | 33% |
Example: If Agust introduces Finnur ($25K) plus two additional investors totaling $150K, and exercises his full purchase option ($27,500), he would hold 33% ownership.
Finnur may earn up to approximately 17% ownership through a combination of employee equity grant, investment, and capital raising bonuses:
| Grant | 3% equity interest, issued upon commencement of employment as Head Baker |
| Consideration | (a) Full-time service as Head Baker; (b) Product development and menu creation; (c) Staff training and quality oversight; (d) Operational leadership of bakery production |
| Vesting | 4-year vesting with 1-year cliff. 25% vests at 12 months, remainder vests quarterly over 36 months. Full acceleration upon change of control. |
| Investment Amount | $25,000 |
| Valuation | $275,000 pre-money (consistent with other investors) |
| Resulting Ownership | Approximately 8% from investment |
Finnur earns additional equity for introducing and closing outside capital investment:
| Capital Raised | Bonus | Cumulative | Total w/ Grant + Investment |
|---|---|---|---|
| $25,000 – $49,999 | 2% | 2% | 13% |
| $50,000 – $99,999 | +2% | 4% | 15% |
| $100,000+ | +2% | 6% | 17% |
Capital bonus equity vests immediately upon funding. "Introduced capital" means investment from parties not previously known to GHC or Agust, where Finnur made the primary introduction.
| Component | Equity | Running Total |
|---|---|---|
| Head Baker equity grant | 3% | 3% |
| Investment ($25K at $275K valuation) | ~8% | 11% |
| Capital raising bonus (if $100K+ raised) | 6% | 17% |
Example: If Finnur invests $25K, receives his 3% Head Baker grant, and introduces $100K in outside capital, he would hold 17% ownership.
| Reserved Pool | Additional equity may be reserved for future key hires beyond Finnur (e.g., General Manager, Assistant Baker) |
| Future Grants | Board may issue equity from available pool to key employees subject to vesting schedules |
| Investment Terms | Outside investors invest at fair market value; minimum investment $10,000 |
| Board | 3-member Board of Managers: 2 appointed by GHC, 1 appointed by Agust Einthorsson |
| GHC Control | GHC maintains majority voting control (50% + 1 unit) on all ordinary matters |
| Major Decisions | Require supermajority (67%) approval: sale of company, new debt >$50,000, capital calls >$25,000, expansion to new locations, amendment to operating agreement, issuance of new equity |
| Day-to-Day | GHC (or its designee) manages daily operations. Bakery operations led by Head Baker with quarterly oversight from Agust. |
| Protective Rights | (a) Material changes to bakery concept or brand identity require Agust consent; (b) Agust anti-dilution protection below 15% (if at 33%) or 10% (if below 33%); (c) Related-party transactions exceeding $10,000 annually require disclosure |
3% of Gross Revenue
Payable monthly to Agust Einthorsson in consideration for:
Benchmark: Consistent with chef/concept licensing arrangements (typical range: 2-5% of revenue)
| Distributions | Distributions made quarterly, pro rata to members, after: (a) operating expenses; (b) debt service; (c) Agust royalty payments; (d) maintenance of 60-day operating reserve; (e) any Board-approved capital reserves |
| Rent | Company pays market rent to property owner (currently GHC affiliate) for bakery premises at 10382 Donner Pass Road. Initial rent to be determined by independent comparable analysis. |
| Expansion Rights | Company has right of first offer to operate bakery/café at future Guesthouse campus locations on substantially similar economic terms |
| Accounting | Company shall maintain books on accrual basis. Annual review by independent CPA. K-1s delivered to members by March 15. |
In consideration for the equity grants and rights described herein, Agust agrees to the following ongoing obligations:
| Trevor Cornwell | CEO of GHC; overall strategic direction; Board member (GHC appointee) |
| Agust Einthorsson | Co-Founder; quarterly operational oversight; concept stewardship; capital introductions; Board member |
| Finnur Ívarsson | Head Baker (anticipated); day-to-day bakery operations; product development; investor |
| January 2026 | HPAC hearing for Titus House Phase 2 (bakery use permit) |
| Q1 2026 | Finalize term sheet; form LLC; execute operating agreement; Agust option period begins |
| Q2-Q3 2026 | Construction and buildout; capital raising |
| Q4 2026 | Soft opening; operational ramp-up |
| Q1 2028 | Agust option exercise period closes |
| Member | Ownership | Source |
|---|---|---|
| GuestHouse Hospitality Company | 76.8% | Founding |
| Agust Einthorsson | 10.0% | Founding grant |
| Finnur Ívarsson | 13.2% | 3% grant + ~8% investment + 2% bonus |
| Member | Ownership | Source |
|---|---|---|
| GuestHouse Hospitality Company | 50% + 1 | Founding |
| Agust Einthorsson | 33% | 10% + 13% bonus + 10% option |
| Finnur Ívarsson | ~17% | 3% + 8% invest + 6% bonus |
In the target scenario, Agust raises $150K+ and exercises his full purchase option; Finnur invests $25K, receives his Head Baker grant, and raises $100K+.
Trevor Cornwell
CEO, GuestHouse Hospitality Company
Date: _________________
Agust Einthorsson
Co-Founder
Date: _________________