Document:

9-5-2006

                       ADVISORY SERVICES AGREEMENT - TERMS

         This Agreement is made and entered into as of May 30, 2006 by and
between Narrowstep, Inc. (the "Company") and Granahan McCourt Advisors, LLC (the
"Advisor").

         1. SERVICES. From time to time upon the Company's request, the Advisor
shall perform for the Company the advisory services listed or described in
Exhibit A: "Scope of Services" attached hereto, as may be amended from time to
time upon the written agreement of the Advisor and the Company (the "Services").

         2. STAFFING. The Advisor shall perform the Services through David
McCourt of such other personnel as may be designated by the Advisor from time to
time. The Company shall have the right to cause the Advisor to remove from
performing Services to the Company any individual to whom the Company reasonably
objects. The Advisor shall take reasonable and appropriate measures to insure
that the personnel who perform the Services are competent and qualified to do
so.

         3. TERM. This Agreement shall commence on the date hereof (the
"Effective Date") and shall continue for a minimum of 120 days from the
Effective Date and shall thereafter terminate on the 30th day after any party
hereto gives notice of the termination of this Agreement.

         4. COMPENSATION FOR SERVICES. In consideration of the Services, the
Company shall pay the Advisor as follows:

                  (a) The Company shall pay the Advisor a monthly fee of $12,600
(or a pro rated portion thereof for partial calendar months) payable in advance
on June 1, 2006 and on the first business day of each calendar month thereafter
during the term hereof.

                  (b) On the Effective Date, the Company shall issue to the
Advisor 100,000 shares of its common stock (the "Shares"), which shall be
subject to forfeiture as provided herein., at a price equal to the fair market
value on the Effective Date. On the first business day of the calendar month
following the Effective Date, 8,337 shares shall vest and on the first business
day of every calendar month thereafter, an additional 8,333 shares shall vest.
The expiration or termination of this Agreement (other than as a result of an
uncured material breach by the Advisor of the terms hereof) shall not affect the
future vesting of any unvested shares. The Advisor shall not sell or otherwise
transfer or dispose of the Shares prior to the date on which they vest but shall
otherwise be entitled to exercise all of the rights of a holder of the Shares,
including, without limitation, the right to vote and receive dividends, prior to
the time the Shares vest.

                  (c) The Advisor shall be entitled to receive warrants
("Warrants") to purchase 2,000 shares of common stock (subject to adjustment in
the event of any stock split, reverse stock split, stock dividend or other
similar change in the common stock) for each Day of Service provided by David C.
McCourt, subject to a monthly cap of 10,000 shares. A "Day of Service" shall be
defined as any day in which Mr. McCourt attends an in-person meeting (or attends
a telephonic meeting of two hours or more) with the Board or with an executive
officer of the Company and renders Services. The Company acknowledges that the
Advisor shall be entitled to Warrants covering 6,000 shares of common stock for
Days of Service provided by the Advisor

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in March, April and May. Consistent with other similar arrangements of the
Company, the Warrants shall (i) be granted in arrears semiannually promptly
following the filing of the Company's Annual Report on From 10-KSB with the
Securities and Exchange Commission (the "SEC"), and the filing of the Company's
Quarterly Report on Form 10-QSB with the SEC for the second fiscal quarter, (ii)
be exercisable for a period of five years from the date of grant, (iii) have an
exercise price equal to the closing bid price of the common stock on the trading
day immediately preceding the date of grant (subject to adjustment as indicated
above) and (iv) otherwise be in the form customarily used by the Company for
similar arrangements. In the event that David McCourt or any other designee of
the Advisor becomes a director of the Company, the Advisor shall no longer be
entitled to receive Warrants for any "Day of Service" to the extent resulting
from Mr. McCourt's or such other designee's service as a director of the
Company, including his attendance at or participation in a meeting of the
Company's Board of Directors or any committee thereof.

                  (d) The Advisor represents and warrants that it is an
"accredited investor" as defined under Regulation D of the Securities Act of
1933, as amended (the "Act"). The Advisor acknowledges that the Shares, the
Warrants and the shares of common stock issuable upon exercise of the Warrants
(collectively, the "Securities") have not been registered under the Act, or any
State securities laws and, therefore, may not be resold or transferred by the
Advisor unless they are subsequently registered under the Act and applicable
State securities or "Blue Sky" laws or exemptions from such registration are
available. No sale or other transfer of the Securities may be made without the
Company's consent unless (i) the offer and sale of the Securities has been
registered under the Act and applicable State securities or "Blue Sky" laws, or
(ii) the offer and sale of the Securities is exempt under the Act and such laws
and the Company has received an opinion of counsel (in form and substance
reasonably satisfactory to the Company) to that effect. Further, the Advisor
acknowledges that a legend summarizing the restrictions described above will be
placed on the certificates representing the Securities.

         5. REIMBURSEMENT FOR EXPENSES. In addition to payment(s) under Section
4, the Company shall reimburse the Advisor for all reasonable out-of-pocket
expenses incurred by the Advisor in the performance of the Services, including,
but not limited to, expenses for travel, lodging and meals, and other relevant
expenses provided that such expenses have been agreed to by the Company in
advance, and provided further that the Company shall reimburse expenses (in
amounts consistent with the Company's expense reimbursement policy for Directors
and Officers) associated with Mr. McCourt's 2 Days of Service in March and
April. Payment shall be made within 30 days of the Company receiving the
Advisor's statement of such expenses.

         6. CONFIDENTIAL INFORMATION. (a) The Advisor recognizes that during the
course of performing Services hereunder the Advisor will have access to and will
acquire confidential and proprietary information relating to the Company, its
subsidiaries and affiliates (the "Proprietary Information"). The Advisor
acknowledges that the Proprietary Information has been and will continue to be
of critical importance to the business and operations of the Company, its
subsidiaries and affiliates. Accordingly, the Advisor shall use such Proprietary
Information only in connection with the provision of Services hereunder and
shall not, without the express prior written consent of the Company, directly or
indirectly disclose any Proprietary Information to any other person or use any
such Proprietary Information, either directly or indirectly, for his benefit or
for the benefit of any third party. Upon any termination or expiration of this

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Agreement, the Advisor shall return to the Company all Proprietary Information
provided to the Advisor by the Company, its subsidiaries or affiliates and shall
destroy all other Proprietary Information then in his possession or subject to
his control and shall certify such destruction to the Company. Under no
circumstances shall the Advisor retain any copies of materials containing
Proprietary Information, or any documents, notes, memoranda, studies, analyses
or other material reduced to a tangible form containing Proprietary Information.
The Advisor's obligations under this Section 6(a) shall survive any termination
or expiration of this Agreement forever.

         (b) The term "Proprietary Information" does not include information
which (i) is or becomes generally available to the public (other than as a
result of a disclosure by the Advisor or a representative of the Advisor), (ii)
becomes available to the Advisor on a non-confidential basis from a source other
than the Company or one of its representatives which the Advisor reasonably
believes is entitled to disclose it, or (iii) was already in the Advisor's
possession on a non-confidential basis prior to its disclosure to the Advisor by
the Company or one of its representatives.

         (c) The Advisor acknowledges that, in the event of any breach of this
Section 6 by him, the Company would be irreparably and immediately harmed and
could not be made whole by monetary damages. Accordingly, the Company, in
addition to any other remedy to which it may be entitled, shall be entitled to
temporary, preliminary and permanent injunctive relief to prevent breaches of
the provisions of this Section 6 and to compel specific performance of the
provisions hereof. The Company shall not be required to post a bond or other
security in connection with the granting of any such relief. These remedies
shall not be deemed to be exclusive remedies for a violation of this Agreement
but shall be in addition to all other remedies available to the Company at law
or in equity.

         7. INDEMNIFICATION. The Company shall indemnify, defend and hold
harmless the Advisor, its affiliates and independent contractors, and its and
their respective managers, members, directors, officers, employees and agents
(each, an "Indemnified Party") from and against any and all losses, claims,
actions, damages, liabilities, costs and expenses (including reasonable
attorneys' fees) as they accrue (collectively, "Losses") relating to, or arising
from or in connection with, the performance of the Services, except to the
extent such Losses arise from the negligence or willful misconduct of the
Indemnified Party. The provisions of this Section 7 shall survive any
termination or expiration of this Agreement.

         8. RELATIONSHIP OF PARTIES. This Agreement does not constitute, and
shall not be construed as constituting, an agency, partnership, or joint venture
relationship between the Company and the Advisor. Neither party shall have the
right to obligate or bind the other party in any manner whatsoever.

         9. MISCELLANEOUS. This Agreement shall be construed and governed under
the laws of the State of New Jersey. Except as otherwise provided herein, the
terms and provisions of this Agreement shall constitute the entire agreement
between the parties with respect to its subject matter and shall supersede any
prior agreement. Notices under this Agreement must be in writing and may be
given by any means for which receipt may be verified. This Agreement may be
amended or modified, and any provision hereof may be waived, only by a writing
signed by each of the parties.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                                Narrowstep Inc.

                                                 /S/ STEVEN A. CROWTHER

                                                Name:  Steven A. Crowther

                                                Title:   SVP and Chief Financial
                                                         Officer

                                                Granahan McCourt Advisors, LLC

                                                /S/ ELLYN M. ITO

                                                Name:  Ellyn M. Ito

                                                Title:   Chief Financial Officer

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                          EXHIBIT A: Scope of Services

I.  M&A STRATEGY

Granahan McCourt Advisors will advise in the development of an M&A strategy as
follows:

         o        Identification of industry dynamics and growth sectors
         o        Identification of key companies for partnership or acquisition
                  targets
         o        Target valuation and preliminary due diligence, however it
                  being understood that full due diligence will be undertaken by
                  the Company's duly appointed financial and legal advisors.
         o        Negotiation assistance and transaction structuring o Financing
                  options - equity, debt, privatization, divestitures, etc.

II.  BANDWIDTH SCALABILITY

Granahan McCourt Advisors will advise in the area of procuring and managing
bandwidth as follows:

         o        Trend analysis for the future direction of the bandwidth
                  market
         o        Determination of how and where the Company should scale the
                  CDN through analysis of
                  o        Bandwidth consumption and 24-month demand forecast -
                           how much bandwidth customers currently consume by
                           channel, by customer, by month, by geography and what
                           is the growth prediction for the next 2 years based
                           on consumer patterns and Narrowstep's revenue growth
                           model.
                  o        Bandwidth providers alternatives - large CDNs in
                           North America and other parts of the world, strategic
                           relationships with large network operators, peering
                           relationships, etc,
         o        Leverage Granahan McCourt industry relationships to begin
                  negotiations for favorable terms, determine partnerships that
                  may be pooled for enhanced bargaining power, etc.

III.  ADVERTISING

Granahan McCourt Advisors will advise Narrowstep in the development of a
"go-to-market" advertising strategy for North America:

         o        Determination of key media buyers for Narrowstep's North
                  American market
         o        Leverage relationships to provide "warm" introduction to
                  agencies and buyers
         o        Explore and develop partnership model with ad agencies and
                  media buyers
         o        Determine "grassroots" methods for tapping niche advertisers
         o        Assist in the development of a Media Kit for send out to
                  agencies & media buyers as well as a version for posting on
                  the Narrowstep website

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         o        Assist in the development of a tailored "Advertising Toolkit"
                  for channel operators indicating methods for accessing media
                  buyers, niche advertisers, Narrowstep media partners, etc.
                  operators

IV.  RECRUITMENT

Granahan McCourt Advisors will assist in the recruitment of key personnel as
directed by the Company. Specifically, Granahan McCourt Advisors will:

         o        Review any employee contracts and suggest exit packages for
                  the release of any employee
         o        Assist in determining the profile, competencies and necessary
                  skills for key positions
         o        Manage the confidential recruiting process for key positions &
                  assist with the negotiations and preparation of Employment
                  Agreements for key individuals who will be joining the company
         o        Prepare communication and talking points for employees, the
                  public and investor communities to explain any relevant
                  changes

V.  TELECOMMUNICATIONS COMPANY STRATEGY

Granahan McCourt Advisors will:

         o        Work with the company in developing streamlined value
                  propositions for 5-10 telcos.

         o        Work in concert with Narrowstep senior management in opening
                  the doors and pitching services to companies.

VI.  Board Advisory Services

Granahan McCourt Advisors shall make David McCourt available to:

o        Provide strategic advice regarding Company operations based on industry
         standards and baseline measures
o        Provide insight regarding Company performance; propose strategic
         solutions to improve performance
o        Propose new strategies and ideas to increase shareholder value
o        Assist board in considering key decisions - providing scenarios and
         options based on key factors
o        Help guide and mediate Board actions with respect to organizational
         priorities and governance concerns
o        Leverage leadership role in industry to promote the Company, and
         support the Company in achieving goals.

                                       6Offer Letter

 Exhibit 10.1 
 July 7, 2006 
 To: Michel J. Maeso 
 Dear Michel,

 On behalf of VitalStream, Inc., I am pleased to offer you the exempt position of Executive Vice President of Sales starting on
July 24, 2006. In this capacity you will report to Jack Waterman, Chief Executive Officer & Chairman. 
 Base compensation for
the position is $190,000 annually ($7,917 per pay period) with two pay periods per month (the 15th and the last day of the month) - see the VitalStream employee manual for additional details. Additionally, you will be eligible to receive up to an
additional $135,000 of annual base bonus, paid pro ratably and quarterly in arrears based on achieving predetermined goals, which shall be awarded for achieving annualized target sales revenues based on the company’s fiscal plan for that year,
which for the balance of 2006 shall be on a pro rata basis. You can achieve up to an additional $25,000 over the base bonus for achieving an additional $3.5 million of revenue over the annual plan, which shall be payable pro rata for amounts
achieved less than $3.5 million; for an incremental amount greater than the base plan plus $3.5 million, you may earn a bonus amount equal to 5% of such incremental amount. 
 Management will request that the VitalStream Board of Directors grant to you an option to purchase 175,000 shares of VitalStream Holdings, Inc. common
stock at an exercise price equal to the closing price of the stock on the date of grant. In addition, if you achieve the target sales revenues based upon the company’s 2006 plan, management will request that the VitalStream Board of Directors
grant to you an option to purchase at a minimum an additional 50,000 shares of VitalStream Holdings, Inc. common stock at an exercise price equal to the closing price of the stock on the date of grant. 
 The Company will reimburse you for up to $15,000 in moving expenses that you may incur in relocating to Southern California. 
 It is important to note that our company adheres to the policy of employment-at-will, which enables either the company or the employee to terminate
employment at any time with or without reason. 
 Any controversy or claim arising out of, or relating to your employment with the company or
termination of employment, shall be settled by final and binding arbitration in the city of Irvine, State of California, and governed by the law in and of the State of California and administered by the American Arbitration Association under its
National Rules for Resolution of Employment Disputes. Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction. 
 The claims covered by this agreement to arbitrate include, but are not limited to claims for breach of contract, covenant of good faith and fair dealing, wage claims, wrongful termination in violation of public
policy, retaliatory or constructive discharge, wrongful demotion, discrimination, harassment, or retaliation prohibited by law, tort claims, claims for violation of public policy or any other claim of a violation of a legally protected right
afforded by State or Federal law, including, but not limited to, the California Fair Employment and Housing Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the California
Labor Code. 

 This agreement to arbitrate excludes claims for normal workers’ compensation benefits and
unemployment insurance benefits. You and VitalStream agree that neither shall initiate nor file any lawsuit or administrative action (other than a charge with the National Labor Relation Board, the Equal Employment Opportunity Commission, or the
Department of Fair Employment and Housing) in any way related to any claim covered by this agreement to arbitrate. 
 Your first ninety
(90) days of employment at VitalStream are considered an Introductory Period, and during that period you will accrue holiday pay benefits described in the Employee Manual, and benefits otherwise required by law. PTO benefits described in the
Employee Manual will begin accruing after the successful completion of your Introductory Period. Under our current insurance plan agreement, you will be eligible for\ health, vision and dental insurance beginning on the first day of the month
following your date of hire. 
 VitalStream is a multimedia content company. In the ordinary course of business, VitalStream and its clients
handle and display a wide variety of material that may or may not seem offensive depending on the individual. Therefore, by signing this letter, you acknowledge and accept that you may be directly or indirectly exposed to such content as part of
your employment at VitalStream, and you assume the risk of such exposure. 
 In accordance with VitalStream policy, final confirmation of
this employment offer is contingent upon the successful completion of VitalStream’s Background Verification process. This offer is also contingent on your reviewing and signing our standard employee documents, such as our confidentiality and
work-for-hire agreement and employee manual. 
 This letter shall constitute the entire Agreement between the parties regarding terms of
employment, and shall supersede any and all understandings on this matter, whether written or oral, and shall not be deemed amended, waived, or modified unless such amendment, waiver or modification is in writing and signed by an authorized officer
of VitalStream. 
 Most importantly, we work hard, we have fun, and we plan to continue developing a world-class content delivery company. I
am pleased to have you as part of our team. 
 Unless accepted by you, this offer expires at the close of business on Monday, July 10,
2006. Your acceptance of this offer will be indicated by your signature below and return to VitalStream. Please return to VitalStream’s Human Resources department by confidential fax (949) 743-2006 a copy of this letter signed by you.

  

									
	 Sincerely,
 VitalStream, Inc.
	 		 	Agreed & Accepted:	 		 	
					
	/s/ Cindy LeBeau	 		 	/s/ Michel J. Maeso	 		 	07/07/2006
	Cindy LeBeau	 		 	Michel J. Maeso	 		 	Date
	Human Resources Manager

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