Exhibit 10.1

                     AMENDED AND RESTATED LICENSE AGREEMENT

         This  Amended and Restated  License  Agreement is made and entered into
effective  as of the 27th  day of  October,  2000,  by and  between  Videolocity
Direct, Inc., a Nevada corporation ("Video Direct"),  and Merit Studios, Inc., a
Delaware corporation ("Merit"), upon the following:

                                    Premises

         WHEREAS,  Merit and Videolocity,  Inc., then named  Moviesonline,  Inc.
("Videolocity"),  entered into that certain  License  Agreement  (the  "Original
Agreement")  dated as of October 27,  2000,  pertaining  to the  WormHole  Video
System; and

         WHEREAS,  Videolocity assigned all its right, title and interest in and
to the  Original  Agreement to Video  Direct with the prior  written  consent of
Merit; and

         WHEREAS,  Merit  and Video  Direct  desire  to amend  and  restate  the
Original Agreement in the manner provided herein;

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  to  be
performed  and  benefits to be received  hereunder,  and other good and valuable
consideration,  the receipt and sufficiency of which are hereby  acknowledged by
the parties,  Merit and Video Direct agree that the Original Agreement is hereby
amended  and  restated as follows and that this  Amended  and  Restated  License
Agreement shall supercede and replace the Original Agreement.

                                    Agreement

         1. Grant of License.  Merit  hereby  grants  Video  Direct an exclusive
license for the period  commencing  as of October 27, 2000 and expiring on March
5, 2011 to use,  sell  sublicenses  to others,  the  WormHole  Video  System (as
defined  herein) in any and all  countries  in the  world.  Such  license  shall
continue on a  non-exclusive  basis from March 6, 2011 until the  expiration  or
termination of this Agreement.  Notwithstanding  the foregoing,  if Video Direct
has not obtained the rights required to deliver content to end users through the
WormHole  Video System,  and commenced  marketing of the WormHole  Video System,
within one (1) year from the date the  WormHole  Video  System is  delivered  to
Video  Direct in a fully  operational  condition,  then  Merit may  convert  the
exclusive rights granted to Video Direct  hereunder to  non-exclusive  rights by
providing  thirty (30) days prior  written  notice of such  conversion  to Video
Direct. The term "WormHole Video System" shall mean the proprietary system being
developed  by Merit which uses Merit's  proprietary  WormHole  data  compression
technology  to compress  and deliver  video  content,  on demand and in a secure
format, by downloading the content from a central server or other source through

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regular telephone lines, broad-band lines, the Internet, wireless communication,
or other communication channels to the end user's set-top box or computer, where
the content is  uncompressed  by the Wormhole  decompression  software  which is
installed  in  the  set-top-box  or  computer,   and  displayed  on  a  standard
television/monitor,  which WormHole Video System is more particularly  described
in Exhibit "A" attached hereto and  incorporated  herein by reference.  The term
WormHole  Video  System  shall refer to the  WormHole  Video  System as the same
exists on the date of this  Agreement and as the same may be modified,  improved
or enhanced  during the term of this Agreement and shall include the system as a
whole  thereof as it applies to the  decompression  (unpeg)  and/or  delivery of
video content to end-users.

         2. Term.  The term of this  Agreement  shall  commence  effective as of
October 27, 2000 and expire at midnight on March 5, 2021.

         3. License  Fees.  Video Direct  shall make the  following  payments to
Merit in the  amounts  and at the times  indicated  as payment  for the  license
granted to Video Direct hereunder:

         (a)      Two Hundred Fifty  Thousand  Dollars  ($250,000) in cash on or
                  before  January  1,  2001,  the  receipt  of which  is  hereby
                  acknowledged by Merit.

         (b)      Ten  percent  (10%) of the Net  Revenue  Per  Transaction  (as
                  defined  herein)  received  by Video  Direct from each item of
                  content  (video or  otherwise)  delivered  by it  through  the
                  WormHole  Video  System  to end users  (the  "Per  Transaction
                  Royalty").  The Per Transaction Royalty shall be paid by Video
                  Direct to Merit on a monthly  basis  within 15 days  following
                  the end of the month in which the Per Transaction  Royalty was
                  earned.  Each payment of the Per Transaction  Royalty shall be
                  accompanied  by  a  statement   setting  forth  the  data  and
                  information used to calculate the Per Transaction  Royalty and
                  showing  the  manner  of  calculation.  For  purposes  of this
                  Agreement, "Net Revenue Per Transaction" shall mean the amount
                  received  by  Video  Direct  from an end  user  for a  content
                  delivery transaction less the cost of the content delivered in
                  such transaction.

         (c)      50% of all amounts  received by Video  Direct from the sale of
                  sublicenses of the WormHole Video System to sublicensees. Such
                  license  fees  shall  be paid by  Video  Direct  to Merit on a
                  monthly basis within 15 days following the end of the month in
                  which such license fees are received by Video Direct.

         4. Obligations of Merit. Merit shall provide the following:

         (a)      Merit shall design,  build,  install and load, as appropriate,
                  the  initial  server  and the  other  components  and items of
                  equipment  (other than the set-top boxes)  necessary for Video

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<PAGE>

                  Direct to operate the Wormhole Video System. This equipment is
                  described  as a server  with  one  gigabyte  of RAM,  dual 800
                  megahertz processor, Intel Pentium Processor, 480 gigabytes of
                  hard drive space, and 16 built-in dial-up modems. Video Direct
                  acknowledges that the initial server has been installed at the
                  location  designated  by it. The  remaining  actions  shall be
                  completed  by Merit and the  Wormhole  Video  System  shall be
                  fully  operational  on or before  April 30,  2001.  Such items
                  shall be provided  at no  additional  charge to Video  Direct.
                  Merit shall  devote all its  resources  to  completion  of the
                  WormHole  Video  System  and  shall  not  undertake  any other
                  activities  or  projects   (specifically   including   further
                  development  of the WormHole data  compression  program) until
                  the WormHole Video System has become fully operational.

         (b)      Merit shall  utilize its WormHole  Technology  to compress the
                  video  content to be  provided  by Video  Direct  through  the
                  WormHole  Video  System.  Merit shall  compress  the first one
                  hundred  (100)  feature  length films  provided to it by Video
                  Direct in DVD  format  for a charge of  $100,000,  $49,000  of
                  which has been paid by Video Direct to date and the balance of
                  which is due on the date the films  have been  compressed  and
                  the WormHole Video System has become  operational.  Thereafter
                  Merit shall compress the feature-length  videos provided to it
                  by Video Direct, in MPEG format on HD, CD, or Tape only, for a
                  charge  of $250  per  video,  with  one-half  of this per film
                  charge  to be paid when the film  products  are  delivered  to
                  Merit  for  compression  and  the  balance  to  be  paid  upon
                  completion.  Compression  services shall be performed by Merit
                  as requested by Video Direct with new releases being completed
                  within the time  periods  dictated by the  competitive  window
                  prevailing in the video industry.  The compression charges for
                  video  content  other than full length video shall be mutually
                  agreed to by Merit and Video  Direct  based on the size of the
                  content file (relative to a full length video) and the time it
                  takes  Merit to  compress  the file  (relative  to the time it
                  takes Merit to compress a full length video).

                  Notwithstanding  the foregoing,  in the event any person other
                  than Videolocity  International,  Inc. or Merit should acquire
                  fifty percent (50%) or more of the  outstanding  capital stock
                  of Video Direct,  the compression  charges referred to in this
                  subparagraph shall be increased to $1,500 per film,  effective
                  immediately   upon  the  acquisition  of  such  interest.   In
                  addition, as long as Videolocity International, Inc. owns over
                  50% of Video  Direct,  if any person  acquires  fifty (50%) or
                  more  of  the   outstanding   capital  stock  of   Videolocity
                  International,  Inc., the compression  charges  referred to in
                  this  subparagraph  shall be  increased  to  $1,500  per film,

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<PAGE>

                  effective  immediately  upon the acquisition of such interest.
                  However,  a distribution of the shares of Video Direct held by
                  Videolocity   International,   Inc.   and/or  Merit  to  their
                  respective  shareholders  shall not be deemed to result in the
                  acquisition of 50% of the  outstanding  capital stock of Video
                  Direct  by  any  person  under  this   subparagraph   of  this
                  Agreement.

         (c)      Merit  has  designed  an  Internet  web  page for use by Video
                  Direct in connection  with the WormHole Video System and shall
                  assign to Video  Direct all its right,  title and  interest in
                  the domain name "TVWEBB." Any further  development shall be at
                  the expense and direction of Video Direct.

         (d)      Merit shall,  upon request,  assist Video Direct in developing
                  and  interfacing a billing  system and content  catalog system
                  for use in connection with the WormHole Video System.

         (e)      Merit shall cause to be delivered  to Video  Direct  1,000,000
                  restricted  shares  of Merit  common  stock  at no  additional
                  charge to Video Direct,  the receipt of which is  acknowledged
                  by Video Direct.

         5.  Obligations  of  Video  Direct.  Video  Direct  shall  provide  the
following:

         (a)      Video Direct shall provide the personnel to operate and market
                  the WormHole  Video System and shall obtain all  clearances or
                  licenses  required for the lawful use of the content  provided
                  by Video Direct for use with the WormHole Video System.

         (b)      Video Direct  currently has  authorized  10,000,000  shares of
                  common stock,  par value $0.001 per share,  of which 5,000,000
                  shares  are issued and  outstanding  and owned by  Videolocity
                  International, Inc. Video Direct also has authorized 1,000,000
                  shares of preferred stock, par value $0.001, none of which has
                  been  issued.   Video  Direct  shall  issue  Merit   2,500,000
                  restricted   shares  of  its   common   stock  as   additional
                  consideration for the license rights granted hereunder.

         (c)      Video  Direct  shall  use its best  efforts  in good  faith to
                  conduct an  initial  public  offering  of the  authorized  and
                  unissued  shares  of its  common  stock  (remaining  after the
                  issuance of shares to Merit as  provided  above) as quickly as
                  practicable  following  the date  the  WormHole  Video  System
                  becomes operational.  The proceeds from such offering shall be
                  used by Video Direct to continue  with the  implementation  of
                  its business plan and the WormHole Video System.

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<PAGE>

         6. System  Functions.  Attached hereto as Exhibit "A" and  incorporated
herein by reference is a description of the WormHole Video System, including its
design and  functions.  Merit  represents  and warrants that the WormHole  Video
System will perform in the manner described in Exhibit "A" and that the WormHole
Video  System  will allow an end user to  download  a  compressed,  full  length
feature  movie  file in less than one  minute  and to  decompress  such file for
viewing in less than 30 minutes.  Merit further  represents that the video files
will  be  viewable  on the  end-users  television  set or  monitor  in the  same
resolution  and quality as the  original  video file  provided to Merit by Video
Direct, Further,  whatever video is supplied to Merit for compression it will be
completely unaltered after unpegging by the Wormhole decompression  software. If
at any time during the term of this Agreement,  the WormHole Video System should
fail to  function  in the manner  described  in  Exhibit  "A",  Merit  agrees to
immediately  take all steps as may be  necessary to remedy the problem and cause
the  system to  perform  in  accordance  with  such  description.  Video  Direct
acknowledges  that the WormHole  Video System can process  video files under any
MPEG format but that Merit has built its Favos  using the MPEG2  format and that
delivery to Merit of video files in a format other than MPEG2 (e.g. MPEG4) would
require  Merit to build new Favos,  which would take  approximately  thirty (30)
days to accomplish.

         7.  Preserving  Rights  to  Content.  Merit  shall  not have any  right
whatsoever  in or to the content  provided by Video Direct to end users  through
the WormHole Video System, including but not limited to, the right to use, copy,
or demonstrate such content. Merit acknowledges and agrees that any and all such
content shall be and remain the sole and  exclusive  property of Video Direct or
other  persons  holding  the  rights to such  content  and Merit  shall take all
necessary  precautions to protect the  confidentiality  of such content.  To the
extent  reasonably  required by the studios,  distributors,  and other owners of
content as a condition  precedent to permitting such content to be compressed by
Merit, Merit agrees to enter into agreements with such content owners containing
reasonable provisions to the foregoing effect.

         8. Audit Rights. Video Direct agrees to allow an independent  certified
public accountant  selected by Merit and reasonably  acceptable to Video Direct,
which  accountants  shall not be compensated on a contingency basis and shall be
bound to keep all  information  confidential  except as  necessary  to  disclose
discrepancies  to Merit,  to audit and analyze  relevant  accounting  records of
Video Direct to ensure  compliance  with all terms of this  Agreement.  Any such
audit shall be permitted  within thirty (30) days of Video Direct's receipt from
Merit of a written  request to audit,  during normal  business  hours, at a time
mutually agreed upon. The cost of such an audit shall be borne by Merit unless a
material  discrepancy  is found,  in which  case the cost of the audit  shall be
borne by Video Direct.  A discrepancy  shall be deemed material if it involves a
payment or adjustment of more than five percent (5%) of the amount  actually due
from Video Direct in any given  quarter.  Audits shall occur no more  frequently
than once per  calendar  year and shall not  interfere  unreasonably  with Video
Direct's business activities and shall be conducted in Video Direct's facilities
during  normal  business  hours on  reasonable  notice.  An audit  may cover any
period;  provided that: (i) the period has not been previously audited; and (ii)

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<PAGE>

the period under audit is within a two-year  period  immediately  preceding  the
commencement of the audit.  Video Direct shall promptly  reimburse Merit for the
amount of any discrepancy  arising out of such audit, which indicates that Merit
is owed amounts  hereunder as well as the costs of the audit, if applicable,  as
provided above.

         9. Scope of License.  The exclusive  license  granted in this Agreement
shall be exclusive both as to Video Direct acting in its own name or for its own
account,  and as to any third  parties that may be licensed or otherwise  acting
under authority of Video Direct.  Specifically,  but not by way of limitation of
the foregoing,  Merit agrees that as long as the license granted to Video Direct
under this Agreement is exclusive, Merit will not in its own name or for its own
account,  nor will it authorize  any third  party,  to sell,  lease,  license or
otherwise  market or sell the WormHole Video System  anywhere in the world,  nor
will Merit use its  WormHole  Technology  to provide  compression  services  for
content that would be competitive with the WormHole Video System.

         10.  Indemnification.  Each  party  (the  "Indemnifying  Party")  shall
defend,  indemnify and hold harmless the other party (the  "Indemnified  Party")
and its agents,  officers,  board members and employees from and against any and
all claims,  damages, losses and expenses (including reasonable attorney's fees)
for  claims  caused by (i)  violation  by the  Indemnifying  Party of any state,
federal or other governmental license or regulations,  and (ii) violation by the
Indemnifying  Party of any third party  proprietary  rights  (including  without
limitation,  patent,  copyright,  trade secret and trademark rights);  and (iii)
damages to property,  injury or death to persons or for any other damage arising
due to the active or passive negligence of the indemnifying party.

         11. Infringement. Merit represents and warrants that it is not aware of
any patent,  copyright,  trade secret or other property right of any third party
that would be infringed or violated by the development, manufacture, use or sale
of the  WormHole  Video  System.  In the  event  that any such  infringement  or
violation is alleged by any third party against  Video  Direct,  Merit agrees to
indemnify and hold Video Direct  harmless  from and against all damages,  claims
and  liabilities  arising in  connection  therewith  and Video Direct  agrees to
cooperate with Merit in the defense of such alleged  infringement  or violation.
Video Direct shall promptly  notify Merit of any such claim of  infringement  or
violation.  Video Direct shall refrain from making any admission of liability or
from settling such claim without the prior written consent of Merit.

         Merit  shall  promptly  and  decisively  assert  its  patent  or  other
intellectual  property  rights against any third party  infringer who is making,
using or selling a device that  infringes  on any of the  intellectual  property
rights  pertaining  to the WormHole  Video System.  Video Direct shall  promptly
notify Merit of any such infringing activity of which it becomes aware.

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<PAGE>

         12. Termination. This Agreement may be terminated only:

         (a)      By one party if the other  party  should be in  default in the
                  material  terms  or  provisions  this   Agreement,   and  such
                  defaulting party has failed to cure such default within thirty
                  (30) days  following  written  notice of such default from the
                  non-defaulting party;

         (b)      By one party, if the other party:  makes a general  assignment
                  for  the  benefit  of   creditors;   suffers  or  permits  the
                  appointment  of a receiver for its business or assets;  files,
                  or has filed against it, an action under any state  insolvency
                  or similar  law for the  purpose of  seeking  its  bankruptcy,
                  reorganization, or liquidation, which action is not discharged
                  within  sixty  (60) days of such  filing;  enters an order for
                  relief under the Bankruptcy  Code; or has its business affairs
                  wound up or liquidated, voluntarily or involuntarily.

         13.  Confidentiality.  Confidential  Information  means all proprietary
data, concepts, projections, strategies, client lists, marketing plans, designs,
processes,  methods of operation,  innovations, and other information pertaining
to the business  operations and other  activities of Merit, on the one hand, and
Video Direct and its affiliated  companies on the other hand.  Each party shall,
during the term of this Agreement use the Confidential  Information disclosed or
provided by the other party,  whether  orally,  written,  by  demonstration,  in
models or otherwise,  only as permitted  under this Agreement and shall maintain
all such  Confidential  Information  in  confidence  and shall not  disclose  or
divulge such  Confidential  Information  to any third party or to any of its own
personnel not having a need to know such information,  provided that the parties
have informed their respective  personnel of the parties' obligations under this
Section 13, and provided  further that each third party to whom such  disclosure
is made shall have entered into a  non-disclosure  agreement  the terms of which
require such third party to maintain  the  confidentiality  of the  Confidential
Information.  Notwithstanding  the  foregoing,  a party  shall not be liable for
disclosure of any such Confidential Information which:

         (a) can be demonstrated by reasonable documentary evidence to have been
in the possession of such party prior to receipt from the other party,  provided
that the source of such  information  was not known to the receiving party to be
bound by a  confidentiality  agreement  with or other  contractual  or fiduciary
obligation of  confidentiality  to the delivering party or any other person with
respect to such information;

         (b) is or becomes  part of the public  domain other than through an act
or omission attributable to employees or agents of the receiving party; or

         (c) is or is made  available  to the  receiving  party by a third party
unaffiliated  with the  delivering  party  and which  has no  obligation  to the
delivering party in respect thereof.

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<PAGE>

Upon the termination of this Agreement,  each party agrees to promptly return to
the other all  Confidential  Information  provided by the other party hereunder,
and all copies thereof, in its possession.

         14. Notices. Any notice,  consent,  approval,  request,  authorization,
direction  or  other  communication  under  this  Agreement  ("Notice")  that is
required to be given in writing will be deemed to have been  delivered and given
for all purposes (i) on the delivery  date if delivered by confirmed  facsimile;
(ii) on the delivery date if delivered  personally to the party to whom the same
is directed;  (iii) one business day after  deposit with a commercial  overnight
carrier,  with written verification of receipt; or (iv) five business days after
the mailing date, whether or not actually received, if sent by U.S. mail, return
receipt requested, postage and charges prepaid, or any other means of rapid mail
delivery for which a receipt is  available.  Such notices  shall be addressed as
follows:

                 If to Merit:            Michael John
                                         President
                                         Merit Studios, Inc.
                                         1930 Village Center Circle
                                         PMB #402, Suite 3
                                         Las Vegas, Nevada 89134

                 If to Video Direct:     George Norman
                                         Chairman
                                         Videolocity Direct, Inc.
                                         358 South 700 East, #B604
                                         Salt Lake City, Utah  84102

or at such other  address as any of the parties  hereto may specify by notice to
the other parties hereto in accordance with this Section 14.

         15.  Publicity.  The  parties  shall  issue a joint  press  release  in
mutually   acceptable  form  announcing   their  execution  of  this  Agreement.
Thereafter, neither party shall issue any press release, file any report or make
any  other  public  communication  that  includes  the  name  or  describes  the
activities  of the other party  without  first  providing the other party with a
copy of any such proposed  release,  filing or communication  and providing such
party with an adequate opportunity to comment thereon.

         16. Assignment.  None of the rights or obligations under this Agreement
shall be assignable  by either party  without the prior  written  consent of the
other party, which consent shall not be unreasonably withheld.

         17.  No  Partnership.  No  agency,   partnership,   joint  venture,  or
employment  is created as a result of this  Agreement  and neither party nor its
agents  shall  have any  authority  of any kind to bind the  other  party in any
respect whatsoever.

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<PAGE>

         18.  Governing Law. This Agreement shall be deemed to have been entered
into,  and shall be construed  and enforced in  accordance  with the laws of the
State of Utah.

         19. Expenses of Legal Proceedings. If any action, suit or proceeding is
brought  by a party  with  respect  to a  matter  or  matters  governed  by this
Agreement, all costs and expenses of the prevailing party incurred in connection
with such proceeding, including reasonable attorneys' fees, shall be paid by the
nonprevailing party.

         20.  Severability.  If any provision of this  Agreement is or is deemed
invalid,  illegal or unenforceable in any jurisdiction,  such provision shall be
deemed amended to conform to applicable  laws so as to be valid and  enforceable
or, if it cannot be so amended without materially  altering the intention of the
parties,  it shall be stricken and the remainder of this Agreement  shall remain
in full force and effect.

         21.  Waiver.  No waiver  of any right  under  this  Agreement  shall be
effective  unless  contained in a writing  signed by the party charged with such
waiver, and no waiver of any right arising from any breach or failure to perform
shall be deemed to be a waiver of any  future  breach or failure or of any other
right arising under this Agreement.

         22. Section Headings. The headings of the sections contained herein are
for  convenience  only and are not  deemed  to limit or  construe  the  contents
thereof.

         23. Authorization.  Each person signing this Agreement on behalf of the
corporate party  represents and warrants that he or she is a duly authorized and
acting officer of the corporation on whose behalf he or she is signing, that the
corporation  has full  power  and  authority  to  execute  and  enter  into this
Agreement,  and that this  Agreement  has been duly and validly  authorized  and
approved by the board of directors of the  corporation  in  accordance  with its
charter, governing instruments and the provisions of applicable law.

         24. Entire Agreement.  This Agreement  constitutes the entire agreement
between  the parties  hereto with  respect to the  subject  matter  hereof,  and
supersedes  any  and  all  prior   agreements,   understandings,   promises  and
representations  made by either party to the other concerning the subject matter
hereof. This Agreement may not be released,  discharged,  amended or modified in
any  manner  except  by an  instrument  in  writing  signed  by duly  authorized
representatives of both parties hereto.

         25.  Binding  Effect.  The rights and  obligations of the parties under
this Agreement shall inure to the benefit of and shall bind the respective legal
representatives, successors and assigns of the parties.

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<PAGE>

         IN WITNESS HEREOF,  Merit and Video Direct have caused this Amended and
Restated  License  Agreement  to be duly  executed as of the date first  written
above.

                           Merit:             Merit Studios, Inc.
                                              A Delaware Corporation


                                              By /s/ Michael John
                                                 --------------------------
                                                 Michael John
                                                 Chairman

                           Video Direct:      Videolocity Direct, Inc.
                                              A Nevada Corporation


                                              By /s/ George Norman
                                                 --------------------------
                                                 George Norman
                                                 Chairman

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