AMENDMENT AND WAIVER AGREEMENT
Exhibit 10.1
AMENDMENT AND WAIVER AGREEMENT (this
“Agreement”) is made as of the 29th day of May 2008, by and among Narrowstep
Inc., a Delaware corporation (the “Company”), and the holders set forth on the
signature pages affixed hereto (each a “Consenting Holder” and, collectively,
the “Consenting Holders”).
Recitals
A. In
August 2007, the Company issued warrants (the “Warrants”) to acquire up to an
aggregate of 22,726,400 shares of the Company’s common stock, par value
$0.000001 per share (the “Common Stock”) at an exercise price of $0.50 per share
(subject to adjustment as provided therein) (the “Exercise Price”).
B. The
Company intends to enter into an Agreement and Plan of Merger (the “Merger
Agreement”) with Onstream Media Corporation (“Onstream”), Onstream Merger Corp.
(“Merger Sub”) and the Stockholders Representative named therein, pursuant to
which Onstream will acquire the Company through a merger of Merger Sub with and
into the Company (the “Merger”). In the Merger, each share of Common
Stock will be converted into a fraction of a share of common stock, par value
$0.001 per share (“Onstream Common Stock”) and a Contingent Value Right (both as
defined in the Merger Agreement) (the “Merger
Consideration”). Capitalized terms used herein have the respective
meanings ascribed thereto in the Merger Agreement unless otherwise defined
herein.
C. Pursuant
to the Merger Agreement, Onstream will assume the Company’s obligations under
the Warrants upon the effectiveness of the Merger.
D. Onstream
has requested that the Consenting Holders, on behalf of themselves and all other
holders of the Warrants, consent to certain amendments and waivers of the terms
of the Warrants in the event that the Merger is consummated.
E. In
order to induce Onstream to enter into the Merger Agreement, the Consenting
Holders desire to consent to such amendments and waivers effective upon the
effective time of the Merger.
F. Pursuant
to Section 10(b) of the Warrants, the Required Holders (as defined therein) have
the right to amend or waive any term or condition of the Warrants on behalf of
all of the holders of the Warrants.
G. The
Consenting Holders constitute the Required Holders.
In consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intended to be
legally bound, the parties hereto hereby agree as follows:
1. Notwithstanding
anything contained in the Warrants to the contrary, effective upon the
effectiveness of the Merger, the Warrants shall be amended so that, immediately
after giving effect to the Merger, the Warrants shall be exercisable on a cash
exercise basis only for an aggregate of (i) 1,000,000 shares of Onstream Common
Stock (the “Warrant Shares”) and (ii) a number of Contingent Value Rights that
would have been issued pursuant to the Merger Agreement and the Warrants without
giving effect to the amendment contained in this paragraph 1, at an Exercise
Price of $3.50 per share (subject to adjustment as provided in the Warrants
except for Section 11(e) which is waived per item 2 below); provided, however,
that no Contingent Value Rights shall be issuable in the event of an exercise of
the Warrants after the Final Exercise Date (as such term is defined in the CVR
Agreement). In no event shall a holder of Warrants have the right to
receive the Merger Consideration upon the exercise of the Warrants following the
Merger. The Warrant Shares and Contingent Value Rights issuable upon
the exercise of the Warrants shall be allocated among the holders of the
Warrants on a pro rata basis.
2. Each
Consenting Holder, on behalf of itself and every other holder of Warrants,
hereby irrevocably and forever waives its rights pursuant to Section 11(e) of
the Warrants, such waiver to be effective only upon the effectiveness of the
Merger.
In
addition, each Consenting Holder, on behalf of itself and every other holder of
Warrants, hereby irrevocably and forever waives its rights pursuant to Article
3.12 (Variable Rate Transactions; Additional Registration Statements) of the
August 8, 2007 Stock Purchase Agreement, such waiver to be effective only upon
the effectiveness of the Merger.
3. Promptly
following the effective time of the Merger, the Company shall cause Onstream to
issue replacement Warrants reflecting the amendments and waivers contained
herein upon surrender of the original Warrants by the holders
thereof.
4. Except
as expressly provided herein, the Warrants shall continue to be in full force
and effect.
5. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York, without reference to the choice of law principles
thereof.
6. This
Agreement may be executed in counterparts, each of which shall be deemed and
original and all of which together has constituted one and the same
instrument.
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REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by the undersigned, thereunto authorized, as of the date first set
forth above.
| NARROWSTEP INC. | |||
|
By:
|
/s/ Xxxx XxxXxxxxx | ||
|
Name:
|
Xxxx
XxxXxxxxx
|
||
|
Title:
|
Chief
Financial Officer
|
||
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|
RENAISSANCE
US GROWTH INVESTMENT TRUST
|
|||
|
PLC
|
|||
|
By: XXXX
Capital Group, Inc.
|
|||
|
Its
Investment Manager
|
|||
|
By:
|
/s/ Xxxxxxx Xxxxxxxxx | ||
|
Name:
|
Xxxxxxx Xxxxxxxxx | ||
|
Title:
|
President | ||
|
Warrants:
4,000,000
|
|||
|
RENAISSANCE
CAPITAL GROWTH & INCOME
|
|||
|
FUND
III, INC.
|
|||
|
By:
|
/s/ Xxxxxxx Xxxxxxxxx | ||
|
Name:
|
Xxxxxxx Xxxxxxxxx | ||
|
Title:
|
President | ||
|
Warrants:
2,000,000
|
|||
|
US
SPECIAL OPPORTUNITIES TRUST PLC
|
|||
|
By: XXXX
Capital Group, Inc.
|
|||
|
Its
Investment Manager
|
|||
|
By:
|
/s/ Xxxxxxx Xxxxxxxxx | ||
|
Name:
|
Xxxxxxx Xxxxxxxxx | ||
|
Title:
|
President | ||
|
Warrants:
2,000,000
|
|||
|
PREMIER
XXXX US EMERGING GROWTH FUND
|
|||
|
LIMITED
|
|||
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By: XXXX
Capital Group, Inc.
|
|||
|
Its
Investment Manager
|
|||
|
By:
|
/s/ Xxxxxxx Xxxxxxxxx | ||
|
Name:
|
Xxxxxxx Xxxxxxxxx | ||
|
Title:
|
President | ||
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|
Warrants:
1,000,000
|
|||
|
|
/s/ Xxxxx X. XxXxxxx | ||
|
Name:
|
Xxxxx X. XxXxxxx | ||
|
Warrants:
2,000,000
|
|||
|
XXXXX
OPPORTUNITY FUND LP
|
|||
|
By:
|
/s/ X. Xxxxxx Xxxxx XX | ||
|
Name:
|
X. Xxxxxx Xxxxx XX | ||
|
Title:
|
General Partner | ||
|
Warrants:
1,556,000
|
|||
|
XXX
OPPORTUNITY LTD
|
|||
|
By:
|
/s/ X. Xxxxxx Xxxxx XX | ||
|
Name:
|
X. Xxxxxx Xxxxx XX | ||
|
Title:
|
Authorized Signatory | ||
|
Warrants:
454,000
|
|||
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