EXHIBIT 10
PALOMAR ENTERPRISES, INC.
JOINT VENUTRE AGREEMENT
To: Date: December 2nd, 2003
K&S FAMILY ENT., LLC.
XX. XXXXXXX X. XXXXXX
Dear Xx. Xxxxxx:
This Joint Venture Agreement is set forth to consummate the transaction (the
"TRANSACTION") by and between Palomar Enterprises, Inc. ("PALR") and K&S Family
Entertainment, LLC. ("K&S") whereby PALR shall invest in 60% of the development
of K&S's entertainment facilities.
1. PALR: Is a publicly traded company traded on the NASDAQ OTC BB market,
trading under the ticker symbol "PALR." PALR is validly existing and
in good standing order without any material debt, liability or pending
or threatened litigation. PALR is in good standing order and fully
reporting with the SEC and NASD.
2. K&S: Is a private Limited Liability Company duly incorporated and
validly existing under the laws of the State of Nevada. K&S deals
primarily in the area of buffet style pizza facilities with state of
the art gaming and entertainment machines for the entire family.
3. THE TRANSACTION:
a. K&S shall develop the Prize Pizza locations at their own expense
and provide a verifiable cost report of the capital expenses.
b. PALR shall issue to K&S restricted common stock in exchange for a
60% interest in their Prize Pizza facility. The amount of stock
to be issued to K&S shall be determined as 60% of the valuation
determined in Item 3(a), above with a maximum not to exceed
$300,000. For example, if the valuation is determined to be
$100,000, PALR shall issue shares of restricted common stock
worth $60,000 to K&S.These shares will be issued at a value of
.01 per share for the first location. The stock shall be issued
in a private transaction pursuant to Section 4(2) of the
Securities Act of 1933, as amended. All subsequent locations will
be exchanged at an agreed upon price based on the fair market
value of PALR common stock.
x. Xxxxx revenues will flow through PALR. Net profits will be
divided 60% to PALR and 40% to K&S.
d. K&S shall be responsible for the day-to-day operations and
management of the Prize Pizza locations. Management Agreements
will be negotiated at fair market value with the entities that
K&S desires. Management agrees to the protocol and methods of
operations defined in the Prize Pizza Statement of Operations.
e. In the event of an operational short-fall (loss), K&S agree to
bridge the operations with the necessary capital until
profitability is sustained. This will be standard until PALR is
solvent enough to assist with help after negotiations between the
Management of K&S and PALR.
f. In the event of default, bankruptcy or the voluntary cessation of
operations by K&S, PALR shall not be held responsible nor
accountable for any liabilities or claims on Prize Pizza and any
related entities.
g. The lease shall be the responsibility of K&S. In the event of
default, bankruptcy, or voluntary cessation of operations, PALR
has the first right of refusal to assume the lease.
h. PALR and K&S agree to develop subsequent facilities as a joint
venture upon mutual agreement. PALR has granted exclusivity to
K&S for 10 locations in the state(s) of New Mexico and Colorado,
as well as the first right of refusal for all additional
facilities developed in these states.
i. PALR shall assist K&S in locating and negotiating a video gaming
contract with a vendor in the respective regions. Net revenue
generated from video games shall be included when determining the
split of profits.
j. K&S shall have 120 days from the signing of this Agreement to
secure the necessary financing and initial location for the first
Prize Pizza in Gallup, NM. K&S will have 12 months from the
opening date of the first location to secure the financing and
location for unit #2. K&S shall have 36 months from the opening
date of unit #2 to secure financing and locations for units 3-10.
There will be no penalties for unseeable delays in store openings
or securing of financing.
k. In the event of Palomar Enterprises Inc. (PALR) loosing good
standing with the exchange commission or change of PALR
ownership, K&S will have the legal right to fall back into 100%
ownership of it's Prize Pizza locations without penalty.
4. CONFIDENTIAL INFORMATION. The parties hereby acknowledge that any
information which shall be disclosed by either party pursuant to this
Agreement and/or the Transaction is a valuable proprietary asset of
the disclosing party and that such disclosing party will sustain
irreparable financial and business loss if such information shall be
made available to any third party and/or to the general public. Both
parties agree to not circumvent the other party. Permission to do so
must be received in writing and accepted by the other party.
5. EXPENSES. Each party shall bear its own costs and expenses in
connection with the Transaction contemplated by this AGREEMENT,
including, without limitation, the build out and valuation of the
Prize Pizza facility.
6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Nevada applicable
to contracts between Nevada residents entered into and to be performed
entirely within the State of Nevada. Any action or proceeding brought
by either party against the other arising out of or related to this
Agreement shall be brought exclusively in a state or federal court in
Xxxxx County, Nevada.
AGREED AND ACCEPTED AGREED AND ACCEPTED
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Palomar Enterprises, Inc. K&S Family Ent., LLC
