UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report /Date of earliest event reported: September 15,
2008
NARROWSTEP
INC.
(Exact
Name of Registrant as Specified in Charter)
Delaware
(State of
Jurisdiction of Incorporation)
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333-108632
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33-1010941
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(Commission File
Number)
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(I.R.S. Employer Identification
No.)
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116
VILLAGE BOULEVARD, SUITE 200
PRINCETON,
NEW JERSEY 08540
(Address
of Principal Executive Offices) (Zip Code)
(609)
945-1760
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive
Agreement.
As
previously disclosed on a Current Report on Form 8-K filed with the Securities
and Exchange Commission on June 3, 2008, Narrowstep Inc., a Delaware corporation
(“
Narrowstep
”
or the “
Company
”), entered
into an Agreement and Plan of Merger (the “
Merger Agreement
”)
with Onstream Media Corporation, a Florida corporation (“
Onstream
”), Onstream
Merger Corp., a newly formed Delaware corporation and a wholly owned subsidiary
of Onstream (“
Merger
Sub
”), and W. Austin Lewis IV, as stockholder representative for the
Narrowstep stockholders, dated as of May 29, 2008. Pursuant to the
Merger Agreement, Onstream will acquire Narrowstep by means of a merger of
Merger Sub with and into Narrowstep (the
“Merger
”) with
Narrowstep continuing as the surviving corporation and a wholly-owned subsidiary
of Onstream after the Merger (the “
Surviving
Corporation
”).
As
previously disclosed on a Current Report on Form 8-K filed with the Securities
and Exchange Commission on August 14, 2008, Narrowstep, Onstream and Merger Sub
entered into an amendment to the Merger Agreement (“
the First Amendment
”)
on August 13, 2008.
On
September 15, 2008, Narrowstep, Onstream and Merger Sub entered into a second
amendment to the Merger Agreement (“
the Second
Amendment
”), dated effective September 12, 2008. Pursuant to the Second
Amendment, among other things, the aggregate number of shares of Onstream common
stock, par value $0.0001 per share (“
Onstream Common
Stock
”), initially issuable in the Merger in exchange for each
outstanding share of Narrowstep common stock, par value $0.000001 per share
(“
Narrowstep Common
Stock
”), other than shares held by Onstream and shares held by a
subsidiary of Narrowstep (collectively, the “
Shares to be
Converted
”) was amended from 9,100,000 to 8,100,000 shares. There was no
change in the potential total share consideration of 20,000,000 shares,
including the shares potentially available under the Contingent Value Rights
Agreement (the
“CVR
Agreement”
) (9,900,000), and the additional number of shares of Onstream
Common Stock (2,000,000) into which the shares of Narrowstep’s Series A
Preferred Stock, par value $0.000001 per share (the “
Series A Preferred
Stock
”) will convert at the time of the Merger.
In
accordance with the terms of the Second Amendment, the CVR Agreement was
revised. Pursuant to those revisions, among other things, the revenue
target for the first revenue measurement time period (the twelve months
commencing on the 180th day following the date of closing of the Merger) was
reduced from $4,250,000 to $4,000,000, if the Minimum Exchange Ratio (as defined
in the Merger Agreement) is used. The definition of Second Year
Revenue Shares was also revised so that if the First Year Revenue is less than
$4,000,000, additional shares of Onstream Common Stock might be issuable in
respect of Second Year Revenue, but only to the extent that Second Year Revenue,
which is for a six month period commencing on the 18th month anniversary of the
closing date, exceeds $2,000,000 (50% of the $4,000,000 annual
threshold).
In
accordance with the terms of the Second Amendment, and notwithstanding anything
to the contrary contained in the CVR Agreement, Onstream may require Narrowstep
to promptly make certain identified adjustments to its operations and the entity
prior to the Effective Time, based solely upon Onstream’s evaluation of certain
items identified in the Second Amendment. In the event that the
certain identified adjustments are made prior to the Effective Time as a result
of Onstream’s directives, the $4,000,000 thresholds discussed in the previous
paragraph will be replaced with $2,000,000, provided that Narrowstep takes all
reasonable actions within its power to carry out those directives. In addition,
the waiting period of three months after the Effective Date (in the CVR
Agreement provision that provides the amounts that the future projected revenues
from the Narrowstep business, as determined in good faith by Onstream’s Board of
Directors, if not exceeded would allow Onstream to terminate the Narrowstep
business) was eliminated, subject to Onstream’s evaluation of certain items
identified in the Second Amendment.
The
foregoing descriptions of the Amendment and the revisions to the CVR Agreement,
which is attached as Exhibit 2.1, are summaries only, do not purport to be
complete and are qualified in their entirety by reference to the full text of
the agreements as described above which are filed as Exhibits to this report and
are incorporated herein by reference.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits
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Exhibit
No.
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Description
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2.1
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Second
Amendment to the Agreement and Plan of Merger, among Onstream Media
Corporation, Onstream Merger Corp. and Narrowstep Inc., dated as
September 12, 2008.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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NARROWSTEP
INC.
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By:
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/s/ David
C. McCourt
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Name:
David C. McCourt
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Title:
Chairman and Interim Chief Executive Officer
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Date: September
19, 2008
