Exhibit
      10.1

     

    AMENDMENT
      AND WAIVER AGREEMENT

     

    AMENDMENT
      AND WAIVER AGREEMENT (this “Agreement”) is made as of the 27th 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.

     

    [THE
      REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]


    
      
         

      

      
        -
          2
          -

        
          

        

      

      
         

      

    


    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/
                Lisa VanPatten

            


    

    
      	
              Name:

            	
              Lisa
                VanPatten

            
	
              Title:

            	
              Chief
                Financial Officer

            


    

     

    
      
         

      

      
        -
          3
          -

        
          

        

      

      
         

      

    

     

    
      	
              RENAISSANCE
                US GROWTH INVESTMENT TRUST

            
	
              PLC

            
	 
	
              By:
                RENN Capital Group, Inc.

            
	
              Its
                Investment Manager

            
	 
	
              By:

            	
              /s/
                Russell Cleveland

            


    

    
      	
              Name:

            	
              Russell
                Cleveland

            
	
              Title:

            	
              President

            


    

    


    Warrants:
      4,000,000


    


    
      	
              RENAISSANCE
                CAPITAL GROWTH & INCOME

              FUND
                III, INC.

            
	 	 
	
              By:

            	
              /s/
                Russell Cleveland

            


    

    
      	
              Name:

            	
              Russell
                Cleveland

            
	
              Title:

            	
              President

            


    

    


    Warrants:
      2,000,000

    


    
      	
              US
                SPECIAL OPPORTUNITIES TRUST PLC

            
	 
	
              By:
                RENN Capital Group, Inc.

            
	
              Its
                Investment Manager

            
	 	 
	
              By:

            	
              /s/
                Russell Cleveland

            


    

    
      	
              Name:

            	
              Russell
                Cleveland

            
	
              Title:

            	
              President

            


    

    


    Warrants:
      2,000,000

    


    
      	
              PREMIER
                RENN US EMERGING GROWTH FUND

            
	
              LIMITED

            
	 
	
              By:
                RENN Capital Group, Inc.

            
	
              Its
                Investment Manager

            
	 	 
	
              By:

            	
              /s/
                Russell Cleveland

            


    

    
      	
              Name:

            	
              Russell
                Cleveland

            
	
              Title:

            	
              President

            


    


    
      
         

      

      
        -
          4
          -

        
          

        

      

      
         

      

    


    Warrants:
      1,000,000

    


    
      	
              /s/
                David C. Mc Court

            
	
              Name: 
                David C. McCourt

            


    

    


    Warrants:
      2,000,000

    


    
      	
              LEWIS
                OPPORTUNITY FUND LP

            
	 	 
	
              By:

            	
              /s/
                Austin Lewis IV

            


    

    
      	
              Name:

            	
              W.
                Austin Lewis IV

            
	
              Title:

            	
              General
                Partner

            


    

    


    Warrants:
      1,556,000

    


    
      	
              LAM
                OPPORTUNITY LTD

            
	 	 
	
              By:

            	
              /s/
                Austin Lewis IV

            


    

    
      	
              Name:

            	
              W.
                Austin Lewis IV

            
	
              Title:

            	
              Authorized
                Signatory

            


    

    


    Warrants:
      454,000


    
      
         

      

      
        -
          5
          -