ASSET PURCHASE MODIFICATION AND LICENSE AGREEMENT
THIS ASSET PURCHASE MODIFICATION AND LICENSE AGREEMENT ("Agreement") is entered
into this 9th day of July, 1998 by and between DP Enterprises, Inc. (formerly
Compact Connection, Inc.), a Nevada corporation ("Seller"), Xxxxxxx X. Xxxxxx
(the "Seller's Shareholder"), TeleServices International Group Inc., a Florida
corporation ("TSIG") and TSIG's wholly-owned subsidiary, Compact Connection,
Inc., a Delaware corporation ("Buyer").
RECITALS:
WHEREAS, Seller, Seller's Shareholder, Buyer and TSIG are parties to an Asset
Purchase Agreement dated April 23, 1998.
WHEREAS, Seller has been unable to provide audited financial statements of its
operations in a timely manner, as required by the Asset Purchase Agreement, but
Seller has represented to Buyer and TSIG that Seller reasonably believes that
the audit will be completed in approximately thirty (30) days.
WHEREAS, the parties to the Asset Purchase Agreement have agreed to modify the
closing date so that Buyer will not be deemed to have acquired the assets of
Seller effective as of April 30, 1998, but rather will acquire the assets after
the audited financial statements of Seller have been completed and are deemed
acceptable to Buyer, in accordance with the Asset Purchase Agreement.
WHEREAS, the parties agree that Seller shall grant certain license rights to
Buyer, which rights shall remain in effect until the closing of the Asset
Purchase Agreement when the assets of Seller are acquired by Buyer, or, in the
event that the Asset Purchase Agreement is not closed, for such an additional
period of time as described herein.
WHEREAS, Seller is the sole and exclusive owner of certain intellectual property
consisting of all rights and interest in the concept of marketing pre-recorded
music recorded on tapes and compact disks, and other mediums that may become
available, using a prepaid "MusicCard," including but not limited to any
trademarks or tradenames for "Compact Connection" and "MusicCard" (all such
rights and interests are collectively referred to as the "Intellectual
Property").
WHEREAS, Seller has the power and authority to grant to Buyer the right,
privilege, and license to use the Intellectual Property on or in association
with the sale of pre-recorded music.
WHEREAS, Buyer desires to obtain from Seller an exclusive license to use the
Intellectual Property; and
WHEREAS, both Buyer and Seller are in agreement with respect to the terms and
conditions on which Buyer shall use the Intellectual Property.
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NOW, THEREFORE, in consideration of the promises and agreements set forth
herein, the parties, each intending to be legally bound hereby, do promise and
agree as follows:
1. LICENSE. Seller hereby grants to Buyer for the Term of this Agreement as
recited herein the exclusive right and license to use the Intellectual Property
in connection with an internet web-site being developed by Buyer for the sale of
pre-recorded music.
2. TERM OF THE AGREEMENT.
2.1 This Agreement and the provisions hereof, except as otherwise provided,
shall be in full force and effect commencing on the date of execution by both
parties and shall extend for ten (10) years (the Term). Buyer shall, thereafter,
have the option of renewing the Agreement for an unlimited number of additional
five (5) year Extended Terms.
2.2 In the event that the audited financial statements of Seller have been
completed and are deemed acceptable to Buyer, in accordance with the Asset
Purchase Agreement, and the assets are acquired, Buyer will own the Intellectual
Property and this license shall automatically expire.
3. COMPENSATION.
3.1 In consideration for the license granted hereunder, Buyer agrees to pay
to Seller a royalty of one percent (1%) of the net income, if any, generated as
a result of sales of pre-recorded music by Buyer on or through the internet web
site during the Term of this Agreement, as may be extended in accordance with
paragraph 2.1 hereinabove.
3.2 Royalty payments shall be payable within sixty (60) days after the end
of each fiscal quarter ended March 31, June 30, September 31, and December 31 of
each calendar year (each fiscal quarter is referred to as a "Royalty Period").
3.3 Net income shall be defined in accordance with generally accepted
accounting principals.
4. TRADEMARK NOTICES.
4.1 Buyer agrees to comply with the marking provisions of the trademark,
patent and copyright laws of the United States with respect to any trademarks.
4.2 Buyer agrees that all promotional, packaging, and advertising material
shall include all appropriate legal notices as required by Seller.
5. INTELLECTUAL PROPERTY RIGHTS.
5.1 Buyer acknowledges Seller's exclusive rights in the Intellectual
Property and, further, acknowledges that the Intellectual Property is unique and
original to Seller and that Seller is the owner thereof. Buyer shall not, at any
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time during or after the effective Term of the Agreement, dispute or contest,
directly or indirectly, Seller's exclusive right and title to the Intellectual
Property or the validity thereof.
5.2 Buyer agrees that its use of the Intellectual Property inures to the
benefit of Seller and that the Buyer shall not acquire any rights in the
Intellectual Property as a result of this license.
6. TERMINATION. The following termination rights are in addition to the
termination rights that may be provided elsewhere in the Agreement:
6.1 Seller's Right of Termination. Seller shall have the right to
immediately terminate this Agreement by giving written notice to Buyer in the
event that Buyer does any of the following:
(a) Commencing in the second year of the Term, ceases to generate any
revenue from sales of pre-recorded music on or through the
internet web-site for two (2) consecutive Royalty Periods.
(b) Fails to make two (2) consecutive required royalty payments in
full.
6.2 Right to Terminate Upon Notice. Either Seller or Buyer may terminate
this Agreement on ninety (90) days' written notice to the other party in the
event of a breach of any provision of this Agreement by the other party,
provided that, during the 90-day period, the breaching party fails to cure such
breach.
6.3 Buyer's Right to Terminate. Buyer shall have the right to terminate
this Agreement at any time on ninety (90) days' written notice to Seller, such
termination to become effective at the conclusion of such 90-day period.
6.4 Automatic Termination. In the event that the audited financial
statements of Seller have been completed and are deemed acceptable to Buyer, in
accordance with the Asset Purchase Agreement, and the assets are acquired, Buyer
will own the Intellectual Property and this Agreement shall automatically
expire.
7. NOTICES.
7.1 Any notice required to be given pursuant to this Agreement shall be in
writing and mailed by certified or registered mail, return receipt requested, or
delivered by a national overnight express service.
7.2 Either party may change the address to which notice or payment is to be
sent by written notice to the other party pursuant to the provisions of this
paragraph.
8. JURISDICTION AND DISPUTES. The parties agree that this Agreement and the
transactions contemplated hereby shall be construed and enforced in accordance
with the laws of the State of Florida, and that any action or proceeding that
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may be brought arising out of, in connection with or by reason of this Agreement
shall be brought only in a court of competent jurisdiction within the county of
Pinellas, Florida. Each of the parties hereto hereby submits, unconditionally
and irrevocably, to the jurisdiction to the aforesaid courts for the purpose of
any such lawsuits, agree to accept service of process by mail, and hereby waive
any jurisdictional or venue defenses otherwise available to it.
9. AGREEMENT BINDING ON SUCCESSORS. The provisions of the Agreement shall be
binding on and shall inure to the benefit of the parties hereto, and their
heirs, administrators, successors, and assigns.
10. WAIVER. No waiver by either party of any default shall be deemed as a
waiver of prior or subsequent default of the same or other provisions of this
Agreement.
11. SEVERABILITY. If any term, clause, or provision hereof is held invalid or
unenforceable by a court of competent jurisdiction, such invalidity shall not
affect the validity or operation of any other term, clause, or provision and
such invalid term, clause, or provision shall be deemed to be severed from the
Agreement.
12. ASSIGNABILITY. The license granted hereunder is personal to Buyer and shall
not be assigned to any third-party by any act of Buyer or by operation of law;
provided, however, that Seller agrees that Buyer may assign the license at any
time to TSIG, or to any wholly-owned subsidiary of Buyer or TSIG.
13. MODIFICATION. This Agreement shall not be modified or amended except in
writing signed by the parties hereto and specifically referring to this
Agreement.
14. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
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Initials: Seller:_____ Seller's Shareholder:____ Buyer____ TSIG____
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have each signed this Agreement effective on the date first set forth
above.
SELLER: BUYER:
DP ENTERPRISES, INC., COMPACT CONNECTION, INC.,
(formerly Compact Connection, Inc.) a Delaware corporation
a Nevada corporation
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxxx Xxxxxx, CEO Xxxxxx X. Xxxxxx, Chairman
0000 Xxxxxxxxxxx Xx., Xxxxx 00 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxx, Xxxxxxxxxx 00000 Xx. Xxxxxxxxxx, Xxxxxxx 00000
SELLER'S SHAREHOLDER: TSIG:
XXXXXXX X. XXXXXX TELESERVICES INTERNATIONAL GROUP INC.
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------ -----------------------------------
Xxxxxxx Xxxxxx, individually Xxxxxx X. Xxxxxx, Chairman
0000 Xxxxxxxxxxx Xx., Xxxxx 00 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxx, Xxxxxxxxxx 00000 Xx. Xxxxxxxxxx, Xxxxxxx 00000
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