EXHIBIT 10.1
________________________________________
November 15, 1996
Xx. Xxxx X. Xxxxxxxxxx, President
Entertainment Corporation of America
Re: Purchase of Stock and Agreement
for Dividend Distribution
Dear Xx. Xxxxxxxxxx:
As you know, we have determined to become a publicly-held company and
have decided to employ the distributive registration technique by which to
accomplish this goal. You indicated that your company has approximatley
900 shareholders and that it is your desire to add value to the ownership of
your company's stock through dividend distributions of other companies'
stock.
Let this letter, then, serve to memorialize our oral agreement relating to the
purchase by Entertainment Corporation of America, a Delaware corporation
("ECA"), of shares of common stock, $.0001 par value per share (the
"Common Stock") of Media Entertainment, Inc., a Nevada corporation
("MEI"), and the distribution of such Common Stock to the shareholders of
ECA, pursuant to an effective Registration Statement on file with the
Securities and Exchange Commission ("SEC"). Our agreement is as follows:
1. In consideration of a cash payment of $360.00 by ECA, MEI agrees to
issue to ECA a total of 360,000 shares of MEI's Common Stock, which
amount of Common Stock shall represent 6% of the outstanding Common
Stock of MEI as of December 31, 1996, on which date MEI will have
completed its first step of capitalization.
2. ECA agrees to declare a dividend with respect to all of the shares of MEI
Common Stock purchased by ECA, whereby ECA would distribute, as a
property dividend, the shares of MEI Common Stock pro rata to its
shareholders.
3. MEI agrees to file with the Securities and Exchange Commission, and
bring to effectiveness, a Registration Statement on Form S-1 with respect to
the dividenddistribution of the MEI Common Stock to the shareholders of
ECA. MEI further agrees and undertakes to pay all of the expenses relating
to the preparation, filing and bringing to effectiveness of such Registration
Statement, including, without limitation, legal fees, accounting fees, SEC
filing fees, Blue Sky filing fees, transfer agent fees, courier fees and
copying
fees. In addition, MEI agrees and undertakes to pay all of the expenses
relating specifically to the dividend distribution, including, without
limitation, prospectus printing fees and postage.
4. MEI agrees to indemnify ECA, its directors and officers against expenses
and liabilities they incur to defend, settle or satisfy any civil, including
any
action alleging negligence, or criminal action brought against them as a
result
of ECA's entering into the agreement memorialized herein, unless, in any
such action, they are judged to have acted with gross negligence or willful
misconduct. In the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act of 1933, as amended, and is,
therefore, unenforceable.
5. ECA agrees to cooperate fully with MEI, its counsel and accountants as
may be necessary to effectuate the preparation, filing and bringing to
effectiveness of the Registration Statement relating to the dividend
distribution.
Should the foregoing accurately reflect your understanding of our agreement,
please sign below in the appropriate place and return to the undersigned.
Thank you for your attention.
Sincerely,
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President
AGREED AND ACCEPTED:
ENTERTAINMENT CORPORATION OF AMERICA
By: /s/ Xxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxxxxx
President
