Document:

REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement ("Agreement") is entered into as of
March 8, 2000, between netguru, inc., a Delaware corporation f/k/a Research
Engineers, Inc., with offices at 22700 Savi Ranch Parkway, Yorba Linda,
California 92887 (the "Company"), and Elliott Associates, L.P., a Delaware
limited partnership, and Westgate International, L.P., a Cayman Islands limited
partnership (individually and collectively, the "Investor").

                              W I T N E S S E T H:

         Whereas, pursuant to that certain Securities Purchase Agreement, dated
on or about the date hereof, by and between the Company and the Investor (the
"Purchase Agreement"), the Company has agreed to sell and issue to the Investor,
and the Investor has agreed to purchase from the Company, an aggregate of 12,000
shares, Liquidation Preference $1,000 each, of the Company's Series A Cumulative
Convertible Preferred Stock (the "Preferred Shares") subject to the terms and
conditions set forth therein, and Warrants (the "Warrants") to purchase shares
of the Company's Common Stock, par value $0.01 per share (the "Common Stock")
subject to the terms and conditions set forth therein; and

         Whereas, the Purchase Agreement provides the Investor an option to
purchase up to $6,000,000 of shares of Common Stock (the "Option Shares"), on
the terms and conditions set forth therein; and

         Whereas, the Purchase Agreement contemplates that the Preferred Shares
will be convertible into shares (the "Common Shares") of Common Stock pursuant
to the terms and conditions set forth in the Certificate of Designations for the
Preferred Shares (the "Certificate"); and

         Now, Therefore, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Purchase
Agreement and this Agreement, the Company and the Investors agree as follows:

                  1. CERTAIN DEFINITIONS. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed thereto in the Purchase
Agreement or the Certificate. As used in this Agreement, the following terms
shall have the following respective meanings:

         "Closing" and "Closing Date" shall have the meanings ascribed to such
terms in the Purchase Agreement; provided that they shall refer to the initial
Closing and Closing Date scheduled under the Purchase Agreement.

         "Commission" or "SEC" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
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         "Holder" and "Holders" shall include the Investor and any transferee or
transferees of the Preferred Shares, Warrants, Common Shares or Registrable
Securities which have not been sold to the public, and any transferee or
transferees of the right to acquire Option Shares, to whom the registration
rights conferred by this Agreement have been transferred in compliance with this
Agreement and the Purchase Agreement.

         The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

         "Registrable Securities" shall mean: (i) the Common Shares or other
securities issued or issuable to each Holder or its permitted transferee or
designee upon conversion of the Preferred Shares or exercise of the Warrants;
(ii) the Option Shares, (iii) securities issued or issuable upon any stock
split, stock dividend, recapitalization or similar event with respect to such
Common Shares; and (iv) any other security issued as a dividend or other
distribution with respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses.

         "Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements of counsel to Holders
(using a single counsel selected by a majority in interest of the Holders) for a
"due diligence" examination of the Company and review of the Registration
Statement and related documents, and the expense of any special audits incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).

         "Registration Statement" shall have the meaning set forth in Section
2(a) herein.

         "Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.

         "Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.

         "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses".

                  2. REGISTRATION REQUIREMENTS. The Company shall use its best
efforts to effect the registration of the Registrable Securities (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act) as would permit or facilitate the sale or distribution
of all the Registrable Securities in the manner (including manner of sale) and
in all states reasonably requested by the Holder. Such best efforts by the
Company shall include, without limitation, the following:

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                           (a) The Company shall, as expeditiously as possible
after the Closing Date:

                           i) But in any event within 60 days of the Closing,
                  prepare and file a registration statement with the Commission
                  pursuant to Rule 415 under the Securities Act on Form S-3
                  under the Securities Act (or in the event that the Company is
                  ineligible to use such form, such other form as the Company is
                  eligible to use under the Securities Act) covering resales by
                  the Holders of the Registrable Securities and no other
                  securities (except shares of Common Stock issuable upon
                  exercise of Warrants issued to Shoreline Pacific Institutional
                  Finance, the Institutional Division of Financial West Group or
                  its designees and those shares listed on Schedule A attached
                  hereto) ("Registration Statement"), which Registration
                  Statement, to the extent allowable under the Securities Act
                  and the rules promulgated thereunder (including Rule 416),
                  shall state that such Registration Statement also covers such
                  indeterminate number of additional shares of Common Stock as
                  may become issuable upon conversion of the Preferred Shares
                  and exercise of the Warrants. The number of shares of Common
                  Stock initially included in such Registration Statement shall
                  be no less than the sum of two times the number of Common
                  Shares that are then issuable upon conversion of the Preferred
                  Shares and exercise of the Warrants (assuming full conversion
                  or exercise, respectively, at the then applicable Conversion
                  Price (as defined in the Certificate) or Exercise Price (as
                  defined in the Warrant), and the number of Option Shares then
                  issuable (assuming full exercise of such option at such time).
                  Nothing in the preceding sentence will limit the Company's
                  obligations to reserve shares of Common Stock pursuant to
                  Section 3.7 of the Purchase Agreement. Thereafter the Company
                  shall use its best efforts to cause such Registration
                  Statement and other filings to be declared effective as soon
                  as possible, and in any event prior to 120 days following the
                  Closing Date. Without limiting the foregoing, the Company will
                  promptly respond to all SEC comments, inquiries and requests,
                  and shall request acceleration of effectiveness at the
                  earliest possible date. The Company shall provide the Holders
                  reasonable opportunity to review any such Registration
                  Statement or amendment or supplement thereto prior to filing.

                           ii) Prepare and file with the SEC such amendments and
                  supplements to such Registration Statement and the prospectus
                  used in connection with such Registration Statement as may be
                  necessary to comply with the provisions of the Act with
                  respect to the disposition of all securities covered by such
                  Registration Statement and notify the Holders of the filing
                  and effectiveness of such Registration Statement and any
                  amendments or supplements.
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                                                                          Page 4

                           iii) Furnish to each Holder such numbers of copies of
                  a current prospectus conforming with the requirements of the
                  Act, copies of the Registration Statement, any amendment or
                  supplement thereto and any documents incorporated by reference
                  therein and such other documents as such Holder may reasonably
                  require in order to facilitate the disposition of Registrable
                  Securities owned by such Holder.

                           iv) Register and qualify the securities covered by
                  such Registration Statement under the securities or "Blue Sky"
                  laws of all domestic jurisdictions; provided that the Company
                  shall not be required in connection therewith or as a
                  condition thereto to qualify to do business or to file a
                  general consent to service of process in any such states or
                  jurisdictions.

                           v) Notify each Holder immediately of the happening of
                  any event (but not the substance or details of any such events
                  unless specifically requested by a Holder) as a result of
                  which the prospectus (including any supplements thereto or
                  thereof) included in such Registration Statement, as then in
                  effect, includes an untrue statement of material fact or omits
                  to state a material fact required to be stated therein or
                  necessary to make the statements therein not misleading in
                  light of the circumstances then existing, and use its best
                  efforts to promptly update and/or correct such prospectus.

                           vi) Notify each Holder immediately of the issuance by
                  the Commission or any state securities commission or agency of
                  any stop order suspending the effectiveness of the
                  Registration Statement or the threat or initiation of any
                  proceedings for that purpose. The Company shall use its best
                  efforts to prevent the issuance of any stop order and, if any
                  stop order is issued, to obtain the lifting thereof at the
                  earliest possible time.

                           vii) Permit counsel to the Holders to review the
                  Registration Statement and all amendments and supplements
                  thereto within a reasonable period of time (but not less than
                  3 full Trading Days (as defined in the Certificate)) prior to
                  each filing, and shall not file any document in a form to
                  which such counsel reasonably objects and will not request
                  acceleration of the Registration Statement without prior
                  notice to such counsel.

                           viii) List the Registrable Securities covered by such
                  Registration Statement with all securities exchange(s) and/or
                  markets on which the Common Stock is then listed and prepare
                  and file any required filings with the Nasdaq National Market
                  or any exchange or market where the Common Shares are traded.

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                           ix) Take all steps necessary to enable Holders to
                  avail themselves of the prospectus delivery mechanism set
                  forth in Rule 153 (or successor thereto) under the Act.

                           (b) Set forth below in this Section 2(b) are (I)
events that may arise that the Investors consider will interfere with the full
enjoyment of their rights under this Agreement, the Purchase Agreement, the
Warrants and the Certificate (the "Interfering Events"), and (II) certain
remedies applicable in each of these events.

                           Paragraphs (i) through (iv) of this Section 2(b)
describe the Interfering Events, provide a remedy to the Investors if an
Interfering Event occurs and provide that the Investors may require that the
Company repurchase outstanding Preferred Shares, Warrants and Option Shares at a
specified price if certain Interfering Events are not timely cured.

                           Paragraph (v) provides, inter alia, that if default
adjustments required as the remedy in the case of certain of the Interfering
Events are not provided when due, the Company may be required by the Investors
to redeem outstanding Preferred Shares, Warrants and Option Shares at a
specified price.

                           Paragraph (vi) provides, inter alia, that the
Investors have the right to specific performance.

                           The preceding paragraphs in this Section 2(b) are
meant to serve only as an introduction to this Section 2(b), are for convenience
only, and are not to be considered in applying, construing or interpreting this
Section 2(b).

                  (i) DELAY IN EFFECTIVENESS OF REGISTRATION STATEMENT.

                           (A) In the event that such Registration Statement has
                  not been declared effective within 120 days from the Closing
                  Date, or the Company at any time fails to issue unlegended
                  Registrable Securities as required by Article VI of the
                  Purchase Agreement, then the Company shall pay each Holder a
                  Monthly Delay Payment (as defined below) for each 30 day
                  period (or portion thereof) that effectiveness of the
                  Registration Statement is delayed or failure to issue such
                  unlegended Registrable Securities persists. In addition to the
                  foregoing, if the Registration Statement has not been declared
                  effective within 210 days after the Closing Date, then each
                  Holder shall have the right to sell, at any time after the
                  210th day after the Closing Date, any or all of its Preferred
                  Shares, Warrants and Option Shares to the Company for
                  consideration (the "Mandatory Repurchase Price") equal to (I)

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                  for the Preferred Shares, the greater of (x) 120% of the
                  Liquidation Preference of all such Preferred Shares being sold
                  to the Company, or (y) the Liquidation Preference for the
                  Preferred Shares being sold to the Company divided by the then
                  applicable Conversion Price multiplied by the greater of the
                  last closing price of the Common Stock on (i) the date a
                  Holder exercises its option pursuant to this Section 2(b) to
                  require repurchase of Preferred Shares or (ii) the date on
                  which the event triggering Holder's remedies under this
                  Section 2(b) first occurred, in each case payable in cash and
                  (II) for the Warrants 120% of the product of (a) the
                  difference between the greater of clauses (i) or (ii) above
                  and the exercise price of the Warrants, multiplied by (b) the
                  number of Warrants being sold to the Company, payable in cash,
                  and (III) for the Option Shares, 120% of the product of (a)
                  the greater of clauses (i) or (ii) above, multiplied by (b)
                  the number of Option Shares being sold to the Company, payable
                  in cash.

                           (B) As used in this Agreement, a "Monthly Delay
                  Payment" shall be a cash payment equal to 1% of the
                  Liquidation Preference of the Preferred Shares held by a
                  Holder for the first 30 day period (or portion thereof) that
                  the specified condition in this Section 2(b) has not been
                  fulfilled or the specified deficiency has not been remedied,
                  2% of such Liquidation Preference for the next 30 day period
                  (or portion thereof) that the specified condition in this
                  Section 2(b) has not been fulfilled or the specified
                  deficiency has not been remedied, and 3% of such Liquidation
                  Preference thereafter for each subsequent 30 day period (or
                  portion thereof) that the specified condition in this Section
                  2(b) has not been fulfilled or the specified deficiency has
                  not been remedied. Payment of the Monthly Delay Payments and
                  Mandatory Repurchase Price shall be due and payable from the
                  Company to such Holder within 5 business days of demand
                  therefor. Without limiting the foregoing, if cash payment of
                  the Mandatory Repurchase Price is not made within such 5
                  business day period, the Holder may revoke and withdraw its
                  election to cause the Company to make such mandatory purchase
                  at any time prior to its receipt of such cash. At the option
                  of the Holder, Monthly Delay Payments may be added to the
                  Liquidation Preference of the Preferred Shares held by it.

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                           (C) Notwithstanding the foregoing, there shall be
                  excluded from the calculation of the number of days that the
                  Registration Statement has not been declared effective the
                  delays which are solely attributable to delays in the
                  Investors providing information required for the Registration
                  Statement.

                  (ii) NO LISTING; PREMIUM PRICE REDEMPTION FOR DELISTING OF
                       CLASS OF SHARES.

                           (A) In the event that the Company fails, refuses or
                  for any other reason is unable to cause the Registrable
                  Securities covered by the Registration Statement to be listed
                  with Nasdaq National Market or one of the other Approved
                  Markets (as defined in the Purchase Agreement) at all times
                  during the period ("Listing Period") from the earlier of the
                  effectiveness of the Registration Statement and the 120th day
                  following the Closing Date until such time as the registration
                  period specified in Section 5 terminates, then the Company
                  shall provide to each Holder a Monthly Delay Payment, for each
                  30 day period or portion thereof during which such listing is
                  not in effect. In addition to the foregoing, following the
                  10th day that such listing is not in effect, each Holder shall
                  have the right to sell to the Company any or all of its
                  Preferred Shares, Warrants and Option Shares at the Mandatory
                  Repurchase Price. The provisions of Section 2(b)(i)(B) shall
                  apply to this Section 2(b)(ii)(A).

                           (B) In the event that shares of Common Stock of the
                  Company are not listed on any of the Approved Markets at all
                  times following the Closing Date, or are otherwise suspended
                  from trading and remain unlisted or suspended for 3
                  consecutive days, then the Company shall provide to each
                  Holder a Monthly Delay Payment for each 30 day period or
                  portion thereof during which such listing is not in effect. In
                  addition to the foregoing, following the 5th day that the
                  shares are not so listed or are otherwise suspended, at the
                  option of each Holder and to the extent such Holder so elects,
                  each Holder shall have the right to sell to the Company the
                  Preferred Shares, the Warrants and the Option Shares held by
                  such Holder, in whole or in part, for the Mandatory Repurchase
                  Price on the terms set forth in Section 2(b)(i)(B) above.

                  (iii) BLACKOUT PERIODS. In the event any Holder's ability to
                  sell Registrable Securities under the Registration Statement
                  is suspended for more than (i) five (5) consecutive days or
                  (ii) twenty (20) days in any calendar year ("Suspension Grace
                  Period"), including without limitation by reason of any
                  suspension or stop order with respect to the Registration
                  Statement or the fact that an event has occurred as a result
                  of which the prospectus (including any supplements thereto)

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                  included in such Registration Statement then in effect
                  includes an untrue statement of material fact or omits to
                  state a material fact required to be stated therein or
                  necessary to make the statements therein not misleading in
                  light of the circumstances then existing (a "Blackout"), then
                  the Company shall provide to each Holder a Monthly Delay
                  Payment for each 30 day period or portion thereof from and
                  after the expiration of the Suspension Grace Period, on the
                  terms set forth in Section 2(b)(i)(B) above. In addition, at
                  any time following the expiration of the Suspension Grace
                  Period if the Blackout continues for more than five (5)
                  additional consecutive days, a Holder shall have the right to
                  sell to the Company its Preferred Shares, Option Shares and/or
                  Warrants in whole or in part for the Mandatory Repurchase
                  Price on the terms set forth in Section 2(b)(i)(B) above.

                  (iv) REDEMPTION FOR CONVERSION DEFICIENCY. In the event that
                  the Company does not have a sufficient number of Common Shares
                  available to satisfy the Company's obligations to any Holder
                  upon receipt of a Conversion Notice (as defined in the
                  Certificate) or exercise of the Warrants or exercise of the
                  option with respect to the Option Shares or the Company is
                  otherwise unable or unwilling for any reason to issue such
                  Common Shares or Option Shares (other than failure of the
                  Holder to comply with the conversion notice and delivery
                  requirements of Section 5 of the Certificate) (each, a
                  "Conversion/Exercise Deficiency") in accordance with the terms
                  of the Certificate, Purchase Agreement and Warrants for any
                  reason after receipt of a Conversion Notice or exercise notice
                  from any Holder, then:

                           (A) The Company shall provide to each Holder a
                  Monthly Delay Payment for each 30 day period or portion
                  thereof following the Conversion/Exercise Deficiency on all
                  outstanding Preferred Shares, Option Shares and Warrants, on
                  the terms set forth in Section 2(b)(i)(B) above.

                           (B) At any time five days after the commencement of
                  the running of the first 30-day period described above in
                  clause (A) of this paragraph (iv), at the request of any
                  Holder, the Company promptly shall purchase from such Holder,
                  for the Mandatory Repurchase Price and on the terms set forth
                  in Section 2(b)(i)(B) above, any and all outstanding Preferred
                  Shares, Option Shares and/or Warrants, if the failure to issue
                  Common Shares results from the lack of a sufficient number
                  thereof and shall purchase all of such Holder's Preferred
                  Shares, Option Shares and/or Warrants (or such portion
                  requested by such Holder) for such consideration and on such
                  terms if the failure to issue Common Shares results from any
                  other cause, or is without cause.

                  (v) MANDATORY PURCHASE PRICE FOR DEFAULTS.

                           (A) The Company acknowledges that any failure,
                  refusal or inability by the Company to perform the obligations
                  described in the foregoing paragraphs (i) through (iv) will
                  cause the Holders to suffer damages in an amount that will be
                  difficult to ascertain, including without limitation damages
                  resulting from the loss of liquidity in the Registrable
                  Securities and the additional investment risk in holding the
                  Preferred Shares, Option Shares, Warrants and Registrable
                  Securities. Accordingly, the parties agree, after consulting
                  with counsel, that it is appropriate to include in this
                  Agreement the foregoing provisions for Monthly Delay Payments
                  and mandatory redemptions in order to compensate the Holders
                  for such damages. The parties acknowledge and agree that the
                  Monthly Delay Payments and mandatory redemptions set forth
                  above represent the parties' good faith effort to quantify
                  such damages and, as such, agree that the form and amount of
                  such payments and mandatory redemptions are reasonable and
                  will not constitute a penalty.

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                           (B) In the event that the Company fails to pay any
                  Monthly Delay Payment within 5 business days of demand
                  therefor, each Holder shall have the right to sell to the
                  Company any or all of its Preferred Shares, Option Shares
                  and/or Warrants at the Mandatory Repurchase Price on the terms
                  set forth in Section 2(b)(i)(B) above.

                           (C) The Holder shall have the right to withdraw any
                  request for redemption hereunder at any time prior to its
                  receipt of the Mandatory Repurchase Price.

                  (vi) CUMULATIVE REMEDIES. The Monthly Delay Payments and
                  mandatory purchases provided for above are in addition to and
                  not in lieu or limitation of any other rights the Holders may
                  have at law, in equity or under the terms of the Certificate,
                  the Purchase Agreement, the Warrants and this Agreement,
                  including without limitation the right to monetary contract
                  damages and specific performance. Each Holder shall be
                  entitled to specific performance of any and all obligations of
                  the Company in connection with the registration rights of the
                  Holders hereunder. Each Monthly Delay Payment provided for
                  herein in the foregoing clauses shall be in addition to each
                  other Monthly Delay Payment; PROVIDED, HOWEVER, that in no
                  event shall the Company be obligated to pay to any holder an
                  aggregate amount greater than three percent (3%) of the
                  Liquidation Preference for the Preferred Shares held by such
                  holder for any 30-day period, provided, that this sentence
                  shall not in any way affect the Company's mandatory purchase
                  obligations hereunder.

                  (vii) REMEDIES FOR REGISTRABLE SECURITIES. In any case in
                  which a Holder of Preferred Shares, Option Shares and/or
                  Warrants has the right to cause the purchase of its securities
                  under this Section 2(b), it shall also have the right to cause
                  the Company to purchase the Registrable Securities that such
                  Holder owns, in whole or in part at the Holder's option, at a
                  purchase price equal to 120% of the product of (a) the greater
                  of the last closing price of the Common Stock on (i) the date
                  a Holder exercises its option pursuant to this Section 2(b) or
                  (ii) the date on which the event triggering Holder's remedies
                  under this Section 2(b) first occurred, multiplied by (b) the
                  number of Registrable Securities being sold to the Company,
                  payable in cash.

                  In the case in which a Holder of Preferred Shares or Warrants
                  would have the right to receive Monthly Delay Payments with
                  respect to Preferred Shares or Warrants under Section 2(b), it
                  shall also have the right to receive payments with respect to
                  Registrable Securities owned by it in an amount at the rate of
                  the Monthly Delay Payments that would have applied to the
                  Preferred Shares or Warrants converted into or exercised for
                  Common Shares had such Preferred Shares or Warrants not been
                  converted or exercised.

                           (c) If the Holder(s) intend to distribute the
Registrable Securities by means of an underwriting, the Holder(s) shall so
advise the Company. Any such underwriting may only be administered by nationally
or regionally recognized investment bankers reasonably satisfactory to the
Company.

                           (d) The Company shall enter into such customary
agreements for secondary offerings (including a customary underwriting agreement
with the underwriter or underwriters, if any) and take all such other reasonable
actions reasonably requested by the Holders in connection therewith in order to
expedite or facilitate the disposition of such Registrable Securities. Whether
or not an underwriting agreement is entered into and whether or not the
Registrable Securities are to be sold in an underwritten offering, the Company
shall:

                           i) make such representations and warranties to the
                  Holders and the underwriter or underwriters, if any, in form,
                  substance and scope as are customarily made by issuers to
                  underwriters in secondary offerings;

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                           ii) cause to be delivered to the sellers of
                  Registrable Securities and the underwriter or underwriters, if
                  any, opinions of independent counsel to the Company, on and
                  dated as of each effective day (or in the case of an
                  underwritten offering, dated the date of delivery of any
                  Registrable Securities sold pursuant thereto) of the
                  Registration Statement, and within ninety (90) days following
                  the end of each fiscal year thereafter, which counsel and
                  opinions (in form, scope and substance) shall be reasonably
                  satisfactory to the Holders and the underwriter(s), if any,
                  and their counsel and covering, without limitation, such
                  matters as the due authorization and issuance of the
                  securities being registered and compliance with securities
                  laws by the Company in connection with the authorization,
                  issuance and registration thereof and other matters that are
                  customarily given to underwriters in underwritten offerings,
                  addressed to the Holders and each underwriter, if any;

                           iii) cause to be delivered, immediately prior to the
                  effectiveness of the Registration Statement (and, in the case
                  of an underwritten offering, at the time of delivery of any
                  Registrable Securities sold pursuant thereto), and at the
                  beginning of each fiscal year following a year during which
                  the Company's independent certified public accountants shall
                  have reviewed any of the Company's books or records, a
                  "comfort" letter from the Company's independent certified
                  public accountants addressed to the Holders and each
                  underwriter, if any, stating that such accountants are
                  independent public accountants within the meaning of the
                  Securities Act and the applicable published rules and
                  regulations thereunder, and otherwise in customary form and
                  covering such financial and accounting matters as are
                  customarily covered by letters of the independent certified
                  public accountants delivered in connection with secondary
                  offerings; such accountants shall have undertaken in each such
                  letter to update the same during each such fiscal year in
                  which such books or records are being reviewed so that each
                  such letter shall remain current, correct and complete
                  throughout such fiscal year; and each such letter and update
                  thereof, if any, shall be reasonably satisfactory to the
                  Holders;

                           iv) if an underwriting agreement is entered into, the
                  same shall include customary indemnification and contribution
                  provisions to and from the underwriters and procedures for
                  secondary underwritten offerings; and

                           v) deliver such documents and certificates as may be
                  reasonably requested by the Holders of the Registrable
                  Securities being sold or the managing underwriter or
                  underwriters, if any, to evidence compliance with clause (i)
                  above and with any customary conditions contained in the
                  underwriting agreement, if any.

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                                                                         Page 11

                           (e) The Company shall make available for inspection
by the Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney or accountant retained by any Holder or underwriter, all financial and
other records customary for purposes of the Holders' due diligence examination
of the Company and review of any Registration Statement, all SEC Documents (as
defined in the Purchase Agreement) filed subsequent to the Closing, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with such Registration Statement, provided that such parties agree to keep such
information confidential.

                           (f) Subject to Section 2(b) above, the Company may
suspend the use of any prospectus used in connection with the Registration
Statement only in the event, and for such period of time as, such a suspension
is required by the rules and regulations of the Commission. The Company will use
its best efforts to cause such suspension to terminate at the earliest possible
date.

                           (g) The Company shall file a Registration Statement
with respect to any newly authorized and/or reserved Registrable Securities
consisting of Common Shares described in clause (i) of the definition of
Registrable Securities within five (5) business days of any stockholders meeting
authorizing same and shall use its best efforts to cause such Registration
Statement to become effective within sixty (60) days of such stockholders
meeting. If the Holders become entitled, pursuant to an event described in
clause (ii), (iii) and (iv) of the definition of Registrable Securities, to
receive any securities in respect of Registrable Securities that were already
included in a Registration Statement, subsequent to the date such Registration
Statement is declared effective, and the Company is unable under the securities
laws to add such securities to the then effective Registration Statement, the
Company shall promptly file, in accordance with the procedures set forth herein,
an additional Registration Statement with respect to such newly Registrable
Securities. The Company shall use its best efforts to (i) cause any such
additional Registration Statement, when filed, to become effective under the
Securities Act, and (ii) keep such additional Registration Statement effective
during the period described in Section 5 below and cause such Registration
Statement to become effective within 45 days of that date that the need to file
the Registration Statement arose. All of the registration rights and remedies
under this Agreement shall apply to the registration of such newly reserved
shares and such new Registrable Securities, including without limitation the
provisions providing for default payments and mandatory redemptions contained
herein.

         3. EXPENSES OF REGISTRATION. All Registration Expenses in connection
with any registration, qualification or compliance with registration pursuant to
this Agreement shall be borne by the Company, and all Selling Expenses of a
Holder shall be borne by such Holder.

         4. REGISTRATION ON FORM S-3. The Company shall use its best efforts to
remain qualified for registration on Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act.

<PAGE>
                                                                         Page 12

         5. REGISTRATION PERIOD. In the case of the registration effected by the
Company pursuant to this Agreement, the Company shall keep such registration
effective until the later of (a) the date on which all the Holders have
completed the sales or distribution described in the Registration Statement
relating thereto or, if earlier, until such Registrable Securities may be sold
by the Holders under Rule 144(k) (provided that the Company's transfer agent has
accepted an instruction from the Company to such effect), and (b) the fifth
(5th) anniversary of the Closing Date.

         6. INDEMNIFICATION.

                  (a) COMPANY INDEMNITY. The Company will indemnify each Holder,
each of its officers, directors, agents and partners, and each person
controlling each of the foregoing, within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls, within
the meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under which
they were made, or any violation by the Company of the Securities Act or any
state securities law or in either case, any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each Holder, each of its officers, directors, agents and
partners, and each person controlling each of the foregoing, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to a Holder to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by such Holder or the underwriter (if any) therefor and stated to be
specifically for use therein. The indemnity agreement contained in this Section
6(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent will not be unreasonably withheld).

                  (b) HOLDER INDEMNITY. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers, agents and partners, and

<PAGE>
                                                                         Page 13

each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, each other Holder (if any), and each of their officers,
directors and partners, and each person controlling such other Holder(s) against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statement therein not misleading in light of the circumstances under which
they were made, and will reimburse the Company and such other Holder(s) and
their directors, officers and partners, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
and defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein, and provided that the maximum
amount for which such Holder shall be liable under this indemnity shall not
exceed the net proceeds received by such Holder from the sale of the Registrable
Securities pursuant to the registration statement in question. The indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities if such settlement
is effected without the consent of such Holder (which consent shall not be
unreasonably withheld).

                  (c) Procedure. Each party entitled to indemnification under
this Section 6 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at its own expense, and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 6 except to
the extent that the Indemnifying Party is materially and adversely affected by
such failure to provide notice. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
non-privileged information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
<PAGE>
                                                                         Page 14

         7. CONTRIBUTION. If the indemnification provided for in Section 6
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.

         In no event shall the obligation of any Indemnifying Party to
contribute under this Section 7 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.

         The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the registration statement in question or
(ii) in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

         8. SURVIVAL. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Purchase Agreement or
any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Registrable Securities.
<PAGE>
                                                                         Page 15

         9. INFORMATION BY HOLDERS. Each Holder shall furnish to the Company
such information regarding such Holder and the distribution and/or sale proposed
by such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. The intended method or methods of
disposition and/or sale (Plan of Distribution) of such securities as so provided
by such Investor shall be included without alteration in the Registration
Statement covering the Registrable Securities and shall not be changed without
written consent of such Holder.

         10. REPLACEMENT CERTIFICATES. The certificate(s) representing the
Common Shares held by any Investor (or then Holder) may be exchanged by such
Investor (or such Holder) at any time and from time to time for certificates
with different denominations representing an equal aggregate number of Common
Shares, as reasonably requested by such Investor (or such Holder) upon
surrendering the same. No service charge will be made for such registration or
transfer or exchange. Upon receipt by the Corporation of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any
certificate representing the Preferred Shares, Option Shares or the Warrants, or
the underlying Common Shares of any of the foregoing, and, in the case of loss,
theft or destruction, of indemnity reasonably satisfactory to it, or upon
surrender and cancellation of such certificate if mutilated, the Corporation
will make and deliver a new certificate of like tenor and dated as of such
cancellation at no charge to the holder.

         11. TRANSFER OR ASSIGNMENT. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investors by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Preferred Shares, Option Shares, Warrants or Registrable
Securities, and all other rights granted to the Investors by the Company
hereunder may be transferred or assigned to any transferee or assignee of any
Preferred Shares, Option Shares, Warrants or Registrable Securities; provided in
each case that the Company must be given written notice by the such Investor at
the time of or within a reasonable time after said transfer or assignment,
stating the name and address of said transferee or assignee and identifying the
securities with respect to which such registration rights are being transferred
or assigned; and provided further that the transferee or assignee of such rights
agrees in writing to be bound by the registration provisions of this Agreement.

         12. MISCELLANEOUS.

                  (a) REMEDIES. The Company and the Investor acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity.
<PAGE>
                                                                         Page 16

                  (b) JURISDICTION. Each of the Company and the Investor (i)
hereby irrevocably submits to the exclusive jurisdiction of the United States
District Court, the New York State courts and other courts of the United States
sitting in New York County, New York for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement and (ii) hereby waives,
and agrees not to assert in any such suit action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company and the Investor consent
to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.

                  (c) NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:

                  to the Company:

                           netguru, inc.
                           22700 Savi Ranch Parkway
                           Yorba Linda, CA  92887
                           Telephone:       (714) 974-2500
                           Facsimile:       (714) 974-4771
                           Attention: Jyoti Chatterjee

                  with a copy to:

                           Rutan & Tucker, LLP
                           611 Anton Boulevard, Fourteenth Floor
                           P.O. Box 1950
                           Costa Mesa, CA  92626
                           Telephone:       (714) 641-5100
                           Facsimile:       (714) 546-9035
                           Attention: Larry A. Cerutti, Esq.

                  to the Investor:

                           c/o Stonington Management Corporation
                           712 Fifth Avenue
                           New York, New York  10019
                           Telephone:       (212) 586-2999
                           Facsimile:       (212) 586-9467
                           Attention:       Mr. Brett Cohen
<PAGE>
                                                                         Page 17

                  with copies to:

                           Kleinberg, Kaplan, Wolff & Cohen, P.C.
                           551 Fifth Avenue
                           New York, New York 10176
                           Facsimile:       (212) 986-8866
                           Attention:       Stephen M. Schultz, Esq.

Any party hereto may from time to time change its address for notices by giving
at least five days' written notice of such changed address to the other parties
hereto.

                  (d) INDEMNITY. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees)
incurred as a result of such parties' breach of any representation, warranty,
covenant or agreement in this Agreement, including, without limitation, any
enforcement of this indemnity.

                  (e) WAIVERS. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter. The representations and warranties and
the agreements and covenants of the Company and each Investor contained herein
shall survive the Closing.

                  (f) EXECUTION IN COUNTERPART. This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart.

                  (g) SIGNATURES. Facsimile signatures shall be valid and
binding on each party submitting the same.

                  (h) ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with
the Purchase Agreement, the Certificate, the Warrants and the agreements and
documents contemplated hereby and thereby, contains the entire understanding and
agreement of the parties, and may not be amended, modified or terminated except
by a written agreement signed by the Company plus the Holders of 75% of the
Preferred Shares issued under the Purchase Agreement to that date; provided that
for the purposes of this Section 12(h)) the Holders of Common Shares still
entitled to registration rights under this Agreement will be deemed to still be
Holders of that number of Preferred Shares which were converted into such number
of Common Shares issued upon conversion which are still held by them.

                  (i) GOVERNING LAW. This Agreement and the validity and
performance of the terms hereof shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed and to
be performed entirely within such state, except to the extent that the law of
the State of Delaware regulates the Company's issuance of securities.
<PAGE>
                                                                         Page 18

                  (j) JURY TRIAL. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY.

                  (k) TITLES. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

                  (l) NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party.

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

                                    NETGURU, INC.

                                    By: /s/ Jyoti Chatterjee
                                       ------------------------
                                    Name:   Jyoti Chatterjee
                                    Title:  President

                                    WESTGATE INTERNATIONAL, L.P.
                                    By:     MARTLEY INTERNATIONAL, INC., as
                                                    attorney-in-fact

                                            By: /s/ Paul E. Singer
                                                ----------------------
                                            Name:    Paul E. Singer
                                            Title:   President

                                    ELLIOTT ASSOCIATES, L.P.

                                    By: /s/ Paul E. Singer
                                        ------------------------
                                    Name:   Paul E. Singer
                                    Title:  General Partner

<PAGE>
                                                                         Page 19

                                   SCHEDULE A
                                   ----------

                          LIST OF SELLING SHAREHOLDERS
                          ----------------------------
                                       AND
                                       ---
                       NUMBER OF SHARES BENEFICIALLY OWNED
                       -----------------------------------THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THIS WARRANT SHALL NOT CONSTITUTE AN OFFER
TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES ARE
"RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE
ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

                          COMMON STOCK PURCHASE WARRANT

     To Purchase Shares of $0.01 Par Value Common Stock ("Common Stock") of

                                  NETGURU, INC.

         THIS CERTIFIES that, for value received, Shoreline Pacific
Institutional Finance (the "INVESTOR") is entitled, upon the terms and subject
to the conditions hereinafter set forth, at any time on or after the date hereof
and on or prior to 8:00 p.m. New York City Time on March 8, 2003 (the
"TERMINATION DATE"), but not thereafter, to subscribe for and purchase from
NETGURU, INC., a Delaware corporation (the "COMPANY"), 12,000 shares of Common
Stock (the "WARRANT SHARES") at an Exercise Price equal to 120% of the Closing
Price (as defined in Section 12(a) below), (as adjusted from time to time
pursuant to the terms hereof, the "EXERCISE PRICE"). The Exercise Price and the
number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. This Warrant is being issued in connection with
the Securities Purchase Agreement dated March 8, 2000 (the "PURCHASE AGREEMENT")
entered into between the Company and the Investor. Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the
Purchase Agreement.

1.       TITLE OF WARRANT. Prior to the expiration hereof and subject to
         compliance with applicable laws, this Warrant and all rights hereunder
         are transferable, in whole or in part, at the office or agency of the
         Company by the Holder hereof in person or by duly authorized attorney,
         upon surrender of this Warrant together with (a) the Assignment Form
         annexed hereto properly endorsed, and (b) any other documentation
         reasonably necessary to satisfy the Company that such transfer is in
         compliance with all applicable securities laws. The term "HOLDER" shall
         refer to the Investor or any subsequent transferee of this Warrant.

2.       AUTHORIZATION OF SHARES. The Company covenants that all shares of
         Common Stock which may be issued upon the exercise of rights
         represented by this Warrant will, upon exercise of the rights
         represented by this Warrant and payment of the Exercise Price as set
         forth herein will be duly authorized, validly issued, fully paid and
         nonassessable and free from all taxes, liens and charges in respect of
         the issue thereof (other than taxes in respect of any transfer
         occurring contemporaneously with such issue or otherwise specified
         herein).
<PAGE>
                                                                          Page 2

3.       EXERCISE OF WARRANT.

(a)      The Holder may exercise this Warrant, in whole or in part, at any time
         and from time to time, by delivering to the offices of the Company or
         any transfer agent for the Common Stock this Warrant, together with a
         Notice of Exercise in the form annexed hereto specifying the number of
         Warrant Shares with respect to which this Warrant is being exercised,
         together with payment to the Company of the Exercise Price therefor.

         In the event that the Warrant is not exercised in full, the number of
         Warrant Shares shall be reduced by the number of such Warrant Shares
         for which this Warrant is exercised and/or surrendered, and the
         Company, at its expense, shall within three (3) Trading Days (as
         defined below) issue and deliver to the Holder a new Warrant of like
         tenor in the name of the Holder or as the Holder (upon payment by
         Holder of any applicable transfer taxes) may request, reflecting such
         adjusted Warrant Shares.

         Certificates for shares of Common Stock purchased hereunder shall be
         delivered to the Holder hereof within two (2) Trading Days after the
         date on which this Warrant shall have been exercised as aforesaid. The
         Holder may withdraw its Notice of Exercise at any time if the Company
         fails to timely deliver the relevant certificates to the Holder as
         provided in this Agreement.

         In lieu of delivering physical certificates representing the Warrant
         Shares issuable upon conversion of this Warrant, provided the Company's
         transfer agent is participating in the Depository Trust Company ("DTC")
         Fast Automated Securities Transfer ("FAST") program, upon request of
         the Holder, the Company shall use its best efforts to cause its
         transfer agent to electronically transmit the Warrant Shares issuable
         upon exercise to the Holder, by crediting the account of the Holder's
         prime broker with DTC through its Deposit Withdrawal Agent Commission
         ("DWAC") system. The time periods for delivery described above shall
         apply to the electronic transmittals through the DWAC system. The
         Company agrees to coordinate with DTC to accomplish this objective.

         (b) CASHLESS EXERCISE. Notwithstanding the foregoing provision
         regarding payment of the Exercise Price in cash, the Holder may elect
         to receive a reduced number of Warrant Shares in lieu of tendering the
         Exercise Price in cash. In such case, the number of Warrant Shares to
         be issued to the Holder shall be computed using the following formula:

                                    X = Y X (A-B)
                                        ---------
                                            A

         where:   X = the number of Warrant Shares to be issued to the Holder;
                  Y = the number of Warrant Shares to be exercised under this
                      Warrant Certificate;
                  A = the Market Value (defined below) of one share of Common
                      Stock; and
                  B = the Exercise Price.
<PAGE>
                                                                          Page 3

         As used herein, "MARKET VALUE" refers to the closing bid price of the
         Common Stock (as reported by Bloomberg, L.P.) on the day before the
         Notice of Exercise and this Warrant are duly surrendered to the Company
         for a full or partial exercise hereof. Notwithstanding the foregoing
         definition, if the Common Stock is not listed on a national securities
         exchange or quoted in the Nasdaq System at the time said Notice of
         Exercise is submitted to the Company in the foregoing manner, the
         Market Value of the Common Stock shall be as reasonably determined in
         good faith by the Board of Directors of the Company and such Holder,
         unless the Company shall become subject to a merger, acquisition, or
         other consolidation pursuant to which the Company is not the surviving
         entity, in which case the Market Value of the Common Stock shall be
         deemed to be the value received by the Company's common shareholders
         pursuant to the Company's acquisition (subject to Section 12 below).

(c)      The term "TRADING DAY" means (x) if the Common Stock is not listed on
         the New York or American Stock Exchange but sale prices of the Common
         Stock are reported on Nasdaq National Market or another automated
         quotation system, a day on which trading is reported on the principal
         automated quotation system on which sales of the Common Stock are
         reported, (y) if the Common Stock is listed on the New York Stock
         Exchange or the American Stock Exchange, a day on which there is
         trading on such stock exchange, or (z) if the foregoing provisions are
         inapplicable, a day on which quotations are reported by National
         Quotation Bureau Incorporated.

4.       NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
         representing fractional shares shall be issued upon the exercise of
         this Warrant. In lieu of issuance of a fractional share upon any
         exercise hereunder, the Company will either round up to nearest whole
         number of shares or pay the cash value of that fractional share
         calculated on the basis of the Fair Market Value (as defined below).

5.       CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares of
         Common Stock upon the exercise of this Warrant shall be made without
         charge to the Holder hereof for any issue or transfer tax or other
         incidental expense in respect of the issuance of such certificate, all
         of which taxes and expenses shall be paid by the Company, and such
         certificates shall be issued in the name of the Holder of this Warrant
         or in such name or names as may be directed by the Holder of this
         Warrant; PROVIDED, HOWEVER, that in the event certificates for shares
         of Common Stock are to be issued in a name other than the name of the
         Holder of this Warrant, this Warrant when surrendered for exercise
         shall be accompanied by the Assignment Form attached hereto duly
         executed by the Holder hereof; and PROVIDED FURTHER, that the Company
         shall not be required to pay any tax or taxes which may be payable in
         respect of any transfer involved in the issuance of any Warrant
         certificates or any certificates for the Warrant Shares other than the
         issuance of a Warrant Certificate to the Holder in connection with the
         Holder's surrender of a Warrant Certificate upon the exercise of all or
         less than all of the Warrants evidenced thereby.

6.       CLOSING OF BOOKS. The Company will at no time close its shareholder
         books or records in any manner which interferes with the timely
         exercise of this Warrant.
<PAGE>
                                                                          Page 4

7.       NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. Subject to Section 12 of this
         Warrant and the provisions of any other written agreement between the
         Company and the Investor, the Investor shall not be entitled to vote or
         receive dividends or be deemed the holder of Warrant Shares or any
         other securities of the Company that may at any time be issuable on the
         exercise hereof for any purpose, nor shall anything contained herein be
         construed to confer upon the Investor, as such, any of the rights of a
         stockholder of the Company or any right to vote for the election of
         directors or upon any matter submitted to stockholders at any meeting
         thereof, or to give or withhold consent to any corporate action
         (whether upon any recapitalization, issuance of stock, reclassification
         of stock, change of par value, or change of stock to no par value,
         consolidation, merger, conveyance or otherwise) or to receive notice of
         meetings, or to receive dividends or subscription rights or otherwise
         until the Warrant shall have been exercised as provided herein.
         However, at the time of the exercise of this Warrant pursuant to
         Section 3 hereof, the Warrant Shares so purchased hereunder shall be
         deemed to be issued to such Holder as the record owner of such shares
         as of the close of business on the date on which this Warrant shall
         have been exercised.

8.       ASSIGNMENT AND TRANSFER OF WARRANT. This Warrant may be assigned by the
         surrender of this Warrant and the Assignment Form annexed hereto duly
         executed at the office of the Company (or such other office or agency
         of the Company or its transfer agent as the Company may designate by
         notice in writing to the registered Holder hereof at the address of
         such Holder appearing on the books of the Company); PROVIDED, HOWEVER,
         that this Warrant may not be resold or otherwise transferred except (i)
         in a transaction registered under the Securities Act of 1933, as
         amended (the "ACT"), or (ii) in a transaction pursuant to an exemption,
         if available, from registration under the Act and whereby, if
         reasonably requested by the Company, an opinion of counsel reasonably
         satisfactory to the Company is obtained by the Holder of this Warrant
         to the effect that the transaction is so exempt. If this Warrant is
         duly assigned in accordance with the terms hereof, then the Company
         agrees, upon the request of the assignee, to amend or supplement
         promptly any effective registration statement covering the Warrant
         Shares so that the direct assignee of the original holder is added as a
         selling stockholder thereunder.

9.       LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT; EXCHANGE. The
         Company represents warrants and covenants that (a) upon receipt by the
         Company of evidence reasonably satisfactory to it of the loss, theft,
         destruction or mutilation of any Warrant or stock certificate
         representing the Warrant Shares, and in case of loss, theft or
         destruction, of indemnity reasonably satisfactory to it, and (b) upon
         surrender and cancellation of such Warrant or stock certificate, if
         mutilated, the Company will make and deliver a new Warrant or stock
         certificate of like tenor and dated as of such cancellation, in lieu of
         this Warrant or stock certificate, without any charge therefor. This
         Warrant is exchangeable at any time for an equal aggregate number of
         Warrants of different denominations, as requested by the holder
         surrendering the same, or in such denominations as may be requested by
         the Holder following determination of the Exercise Price. No service
         charge will be made for such registration or transfer, exchange or
         reissuance.
<PAGE>
                                                                          Page 5

10.      SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the
         taking of any action or the expiration of any right required or granted
         herein shall be a Saturday, Sunday or a legal holiday, then such action
         may be taken or such right may be exercised on the next succeeding day
         not a legal holiday.

11.      EFFECT OF CERTAIN EVENTS. If at any time while this Warrant or any
         portion thereof is outstanding and unexpired there shall be a
         transaction (by merger or otherwise) in which more than 50% of the
         voting power of the Company is disposed of (collectively, a "SALE OR
         MERGER TRANSACTION"), the Holder of this Warrant shall have the right
         thereafter to purchase, by exercise of this Warrant and payment of the
         aggregate Exercise Price in effect immediately prior to such action,
         the kind and amount of shares and other securities and property which
         it would have owned or have been entitled to receive after the
         happening of such transaction had this Warrant been exercised
         immediately prior thereto, subject to further adjustment as provided in
         Section 12.

12.      ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

         The number of and kind of securities purchasable upon exercise of this
         Warrant and the Exercise Price shall be subject to adjustment from time
         to time as set forth in this Section 12.

(a)      SUBDIVISIONS, COMBINATIONS, STOCK DIVIDENDS AND OTHER ISSUANCES. If the
         Company shall, at any time while this Warrant is outstanding, (A) pay a
         stock dividend or otherwise make a distribution or distributions on any
         equity securities (including instruments or securities convertible into
         or exchangeable for such equity securities) in shares of Common Stock,
         (B) subdivide outstanding shares of Common Stock into a larger number
         of shares, or (C) combine outstanding Common Stock into a smaller
         number of shares, then each Affected Exercise Price (as defined below)
         shall be multiplied by a fraction, the numerator of which shall be the
         number of shares of Common Stock outstanding before such event and the
         denominator of which shall be the number of shares of Common Stock
         outstanding after such event. Any adjustment made pursuant to this
         Section 12(a) shall become effective immediately after the record date
         for the determination of stockholders entitled to receive such dividend
         or distribution and shall become effective immediately after the
         effective date in the case of a subdivision or combination. As used
         herein, the Affected Exercise Prices (each an "AFFECTED EXERCISE
         PRICE") shall refer to: (i) the Exercise Price and (ii) each reported
         price for the Common Stock on the Principal Market (as defined in the
         Purchase Agreement) occurring on any Trading Day included in the period
         used for determining the Closing Price, which Trading Day occurred
         before the record date in the case of events referred to in clause (A)
         of this subparagraph 12(a) and the effective date in the case of the
         events referred to in clauses (B) and (C) of this subparagraph 12(a).
         "CLOSING PRICE" shall mean (i) for the period after the 20th Trading
         Day following the Closing Date (as defined in the Purchase Agreement),
         the average of the lowest 5 closing bid prices of the Common Stock
         recorded on the Principal Market (as reported by the Bloomberg
         Financial Network or any successor reporting source) for the 20 Trading
         Days immediately following the Closing Date (as defined in the Purchase
         Agreement), and (ii) for the period on or before the 20th Trading Day
         following the Closing Date, the average of the 5 closing bid prices of
         the Common Stock recorded on the Principal Market (as reported by the
         Bloomberg financial network or any successor reporting service) on the
         5 Trading Days immediately preceding the Closing Date. The number of
         shares which may be purchased hereunder shall be increased
         proportionately to any reduction in Exercise Price pursuant to this
         paragraph 12(a), so that after such adjustments the aggregate Exercise
         Price payable hereunder for the increased number of shares shall be the
         same as the aggregate Exercise Price in effect just prior to such
         adjustments.
<PAGE>
                                                                          Page 6

(b)      OTHER DISTRIBUTIONS. If at any time after the date hereof the Company
         distributes to holders of its Common Stock, other than as part of its
         dissolution, liquidation or the winding up of its affairs, any shares
         of its capital stock, any evidence of indebtedness or any of its assets
         (other than Common Stock), then the number of Warrant Shares for which
         this Warrant is exercisable shall be increased to equal: (i) the number
         of Warrant Shares for which this Warrant is exercisable immediately
         prior to such event, (ii) multiplied by a fraction, (A) the numerator
         of which shall be the Fair Market Value (as defined below) per share of
         Common Stock on the record date for the dividend or distribution, and
         (B) the denominator of which shall be the Fair Market Value price per
         share of Common Stock on the record date for the dividend or
         distribution minus the amount allocable to one share of Common Stock of
         the value (as jointly determined in good faith by the Board of
         Directors of the Company and the Holder) of any and all such evidences
         of indebtedness, shares of capital stock, other securities or property,
         so distributed. For purposes of this Warrant, "FAIR MARKET VALUE" shall
         equal the 5 Trading Day average closing trading price of the Common
         Stock on the Principal Market (as defined in the Purchase Agreement)
         for the 5 Trading Days preceding the date of determination or, if the
         Common Stock is not listed or admitted to trading on any Principal
         Market, and the average price cannot be determined as contemplated
         above, the Fair Market Value of the Common Stock shall be as reasonably
         determined in good faith by the Company's Board of Directors and the
         Holder. The Exercise Price shall be reduced to equal: (i) the Exercise
         Price in effect immediately before the occurrence of any event (ii)
         multiplied by a fraction, (A) the numerator of which is the number of
         Warrant Shares for which this Warrant is exercisable immediately before
         the adjustment, and (B) the denominator of which is the number of
         Warrant Shares for which this Warrant is exercisable immediately after
         the adjustment.

(c)      MERGER, ETC. If at any time after the date hereof there shall be a
         merger or consolidation of the Company with or into or a transfer of
         all or substantially all of the assets of the Company to another
         entity, then the Holder shall be entitled to receive upon or after such
         transfer, merger or consolidation becoming effective, and upon payment
         of the Exercise Price then in effect, the number of shares or other
         securities or property of the Company or of the successor corporation
         resulting from such merger or consolidation, which would have been
         received by the Holder for the shares of stock subject to this Warrant
         had this Warrant been exercised just prior to such transfer, merger or
         consolidation becoming effective or to the applicable record date
         thereof, as the case may be. The Company will not merge or consolidate
         with or into any other corporation, or sell or otherwise transfer its
         property, assets and business substantially as an entirety to another
         corporation, unless the corporation resulting from such merger or
         consolidation (if not the Company), or such transferee corporation, as
         the case may be, shall expressly assume in writing the due and punctual
         performance and observance of each and every covenant and condition of
         this Warrant to be performed and observed by the Company.
<PAGE>
                                                                          Page 7

(d)      RECLASSIFICATION, ETC. If at any time after the date hereof there shall
         be a reorganization or reclassification of the securities as to which
         purchase rights under this Warrant exist into the same or a different
         number of securities of any other class or classes, then the Holder
         shall thereafter be entitled to receive upon exercise of this Warrant,
         during the period specified herein and upon payment of the Exercise
         Price then in effect, the number of shares or other securities or
         property resulting from such reorganization or reclassification, which
         would have been received by the Holder for the shares of stock subject
         to this Warrant had this Warrant at such time been exercised.

(e)      EXERCISE PRICE ADJUSTMENT. In the event that the Company issues or
         sells any Common Stock or securities which are convertible into or
         exchangeable for its Common Stock or any convertible securities, or any
         warrants or other rights to subscribe for or to purchase or any options
         for the purchase of its Common Stock or any such convertible securities
         (other than shares or options issued or which may be issued pursuant to
         (i) the Company's current employee option plans or shares issued upon
         exercise of options, warrants or rights outstanding on the date of the
         Agreement and listed in the Company's most recent periodic report filed
         under the Exchange Act, (ii) arrangements with the Investor, (iii) an
         underwriting agreement, to one or more underwriters in connection with
         a bona fide public offering (as defined in the Certificate), or (iv)
         strategic acquisitions of other entities by the Company which engage in
         businesses related or complementary to the Company's business) at an
         effective price per share which is less than the greater of the
         Exercise Price then in effect or the Fair Market Value (as described in
         Section 12(b) above) of the Common Stock on the trading day next
         preceding such issue or sale, then in each such case, the Exercise
         Price in effect immediately prior to such issue or sale shall be
         reduced effective concurrently with such issue or sale to an amount
         determined by multiplying the Exercise Price then in effect by a
         fraction, (x) the numerator of which shall be the sum of (1) the number
         of shares of Common Stock outstanding immediately prior to such issue
         or sale, plus (2) the number of shares of Common Stock which the
         aggregate consideration received by the Company for such additional
         shares would purchase at such Fair Market Value or Exercise Price,
         whichever is greater, then in effect; and (y) the denominator of which
         shall be the number of shares of Common Stock of the Company
         outstanding immediately after such issue or sale.

         For the purposes of the foregoing adjustment, in the case of the
         issuance of any convertible securities, warrants, options or other
         rights to subscribe for or to purchase or exchange for, shares of
         Common Stock ("CONVERTIBLE SECURITIES"), the maximum number of shares
         of Common Stock issuable upon exercise, exchange or conversion of such
         Convertible Securities shall be deemed to be outstanding, provided that
         no further adjustment shall be made upon the actual issuance of Common
         Stock upon exercise, exchange or conversion of such Convertible
         Securities.

         The number of shares which may be purchased hereunder shall be
         increased proportionately to any reduction in Exercise Price pursuant
         to this paragraph 12(e), so that after such adjustments the aggregate
         Exercise Price payable hereunder for the increased number of shares
         shall be the same as the aggregate Exercise Price in effect just prior
         to such adjustments.
<PAGE>
                                                                          Page 8

         In the event of any such issuance for a consideration which is less
         than such Fair Market Value and also less than the Exercise Price then
         in effect, than there shall be only one such adjustment by reason of
         such issuance, such adjustment to be that which results in the greatest
         reduction of the Exercise Price computed as aforesaid.

(f)      (i) The terms of any reorganization, consolidation, merger, sale,
         transfer or share exchange shall include such terms so as to continue
         to give to the holder hereof the right to receive the securities or
         property set forth in this Section 12 upon any exercise following any
         such reclassification, consolidation, merger, sale, transfer or share
         exchange.

         (ii) In the event of any adjustment in the number of Warrant Shares
         issuable hereunder upon exercise, the Exercise Price shall be inversely
         proportionately increased or decreased as the case may be, such that
         aggregate purchase price for Warrant Shares upon full exercise of this
         Warrant shall remain the same. Similarly, in the event of any
         adjustment in the Exercise Price, the number of Warrant Shares issuable
         hereunder upon exercise shall be inversely proportionately increased or
         decreased as the case may be, such that aggregate purchase price for
         Warrant Shares upon full exercise of this Warrant shall remain the
         same.

13.      VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may at its option, at
         any time during the term of this Warrant, reduce but not increase the
         then current Exercise Price to any amount and for any period of time
         deemed appropriate by the Board of Directors of the Company.

14.      NOTICE OF ADJUSTMENT; NOTICE OF EVENTS. (i) Whenever the number of
         Warrant Shares or number or kind of securities or other property
         purchasable upon the exercise of this Warrant or the Exercise Price is
         adjusted, the Company shall promptly mail to the Holder of this Warrant
         a notice setting forth the number of Warrant Shares (and other
         securities or property) purchasable upon the exercise of this Warrant
         and the Exercise Price of such Warrant Shares after such adjustment and
         setting forth the computation of such adjustment and a brief statement
         of the facts requiring such adjustment. (ii) If: (A) the Company shall
         declare a dividend (or any other distribution) on its Common Stock; or
         (B) the Company shall declare a special nonrecurring cash dividend on
         or a redemption of its Common Stock; or (C) the Company shall authorize
         the granting to all holders of the Common Stock rights or warrants to
         subscribe for or purchase any shares of capital stock of any class or
         of any rights; or (D) the approval of any stockholders of the Company
         shall be required in connection with any reclassification of the Common
         Stock of the Company, any consolidation or merger to which the Company
         is a party, any sale or transfer of all or substantially all of the
         assets of the Company, or any compulsory share exchange whereby the
         Common Stock is converted into other securities, cash or property; or
         (E) the Company shall authorize the voluntary dissolution, liquidation

<PAGE>
                                                                          Page 9

         or winding up of the affairs of the Company, then the Company shall
         cause to be mailed to each Warrant holder at their last addresses as
         they shall appear upon the Warrant register of the Company, at least 30
         calendar days prior to the applicable record or effective date
         hereinafter specified, a notice stating (x) the date on which a record
         is to be taken for the purpose of such dividend, distribution,
         redemption, rights or warrants, or if a record is not to be taken, the
         date as of which the holders of Common Stock of record to be entitled
         to such dividend, distributions, redemption, rights or warrants are to
         be determined or (y) the date on which such reclassification,
         consolidation, merger, sale, transfer or share exchange is expected to
         become effective or close, and the date as of which it is expected that
         holders of Common Stock of record shall be entitled to exchange their
         shares of Common Stock for securities, cash or other property
         deliverable upon such reclassification, consolidation, merger, sale,
         transfer, share exchange, dissolution, liquidation or winding up.

15.      AUTHORIZED SHARES. The Company covenants that during the period the
         Warrant is outstanding and exercisable, it will reserve from its
         authorized and unissued Common Stock a sufficient number of shares to
         provide for the issuance of the Warrant Shares upon the exercise of any
         and all purchase rights under this Warrant. The Company further
         covenants that its issuance of this Warrant shall constitute full
         authority to its officers who are charged with the duty of executing
         stock certificates to execute and issue the necessary certificates for
         the Warrant Shares upon the exercise of the purchase rights under this
         Warrant. The Company will take all such reasonable action as may be
         necessary to assure that such Warrant Shares may be issued as provided
         herein without violation of any applicable law, regulation, or rule of
         any applicable market or exchange.

16.      9.99% LIMITATION.

                  (i) Notwithstanding anything to the contrary contained herein,
         the number of shares of Common Stock that may be acquired by the holder
         upon exercise pursuant to the terms hereof shall not exceed a number
         that, when added to the total number of shares of Common Stock deemed
         beneficially owned by such holder (other than by virtue of the
         ownership of securities or rights to acquire securities that have
         limitations on the holder's right to convert, exercise or purchase
         similar to the limitation set forth herein), together with all shares
         of Common Stock deemed beneficially owned by the holder's "affiliates"
         (as defined in Rule 144 of the Act) ("Aggregation Parties") that would
         be aggregated for purposes of determining whether a group under Section
         13(d) of the Securities Exchange Act of 1934 as amended, exists, would
         exceed 9.99% of the total issued and outstanding shares of the Common
         Stock (the "Restricted Ownership Percentage"); PROVIDED that (w) each
         holder shall have the right at any time and from time to time to reduce
         its Restricted Ownership Percentage immediately upon notice to the
         Company and (x) each holder shall have the right (subject to waiver) at
         any time and from time to time, to increase its Restricted Ownership
         Percentage immediately in the event of the announcement as pending or
         planned, of a transaction or event referred to in Section 5(m) of the
         Certificate.
<PAGE>
                                                                         Page 10

                  (ii) Each time (a "COVENANT TIME") the holder or an
         Aggregation Party makes a Triggering Acquisition (as defined below) of
         shares of Common Stock (the "TRIGGERING SHARES"), the holder will be
         deemed to covenant that it will not, during the balance of the day on
         which such Triggering Acquisition occurs, and during the 61-day period
         beginning immediately after that day, acquire additional shares of
         Common Stock pursuant to rights-to-acquire existing at that Covenant
         Time, if the aggregate amount of such additional shares so acquired
         (without reducing that amount by any dispositions) would exceed (x)
         9.99% of the number of shares of Common Stock outstanding at that
         Covenant Time (including the Triggering Shares) minus (y) the number of
         shares of Common Stock actually owned by the holder at that Covenant
         Time (regardless of how or when acquired, and including the Triggering
         Shares). A "TRIGGERING ACQUISITION" means the giving of a Notice of
         Exercise or any other acquisition of Common Stock by the holder or an
         Aggregation Party; PROVIDED, however, that with respect to the giving
         of such Notice of Exercise, if the associated issuance of shares of
         Common Stock does not occur, such event shall cease to be a Triggering
         Acquisition and the related covenant under this paragraph shall
         terminate. At each Covenant Time, the holder shall be deemed to waive
         any right it would otherwise have to acquire shares of Common Stock to
         the extent that such acquisition would violate any covenant given by
         the holder under this paragraph. Notwithstanding anything to the
         contrary in the Transaction Documents, in the event of a conflict
         between any covenant given under this paragraph and any obligation of
         the holder to exercise this Warrant pursuant to the Transaction
         Documents, the former shall supersede the latter, and the latter shall
         be reduced accordingly. For the avoidance of doubt:

                           (A)      The covenant to be given pursuant to this
                                    paragraph will be given at every Covenant
                                    Time and shall be calculated based on the
                                    circumstances then in effect. The making of
                                    a covenant at one Covenant Time shall not
                                    terminate or modify any prior covenants.

                           (B)      The holder may therefore from time to time
                                    be subject to multiple such covenants, each
                                    one having been made at a different Covenant
                                    Time, and some possibly being more
                                    restrictive than others. The holder must
                                    comply with all such covenants then in
                                    effect.

17.      COMPLIANCE WITH SECURITIES LAWS. (a) The Holder hereof acknowledges
         that the Warrant Shares acquired upon the exercise of this Warrant, if
         not registered (or if no exemption from registration exists), will have
         restrictions upon resale imposed by state and federal securities laws.
         Each certificate representing the Warrant Shares issued to the Holder
         upon exercise (if not registered, for resale or otherwise, or if no
         exemption from registration exists) will bear substantially the
         following legend:

         THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
         COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
         AND, ACCORDINGLY, MAY NOT BE OFFERED, TRANSFERRED, SOLD OR OTHERWISE
         DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
         UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
         IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
         SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
<PAGE>
                                                                         Page 11

(b)      Without limiting the Investor's right to transfer, assign or otherwise
         convey the Warrant or Warrant Shares in compliance with all applicable
         securities laws, the Investor of this Warrant, by acceptance hereof,
         acknowledges that this Warrant and the Warrant Shares to be issued upon
         exercise hereof are being acquired solely for the Investor's own
         account and not as a nominee for any other party, and that the Investor
         will not offer, sell or otherwise dispose of this Warrant or any
         Warrant Shares to be issued upon exercise hereof except under
         circumstances that will not result in a violation of applicable federal
         and state securities laws.

18.      MISCELLANEOUS.

(a)      ISSUE DATE; CHOICE OF LAW; VENUE; JURISDICTION. The provisions of this
         Warrant shall be construed and shall be given effect in all respects as
         if it had been issued and delivered by the Company on the date hereof.
         This Warrant shall be binding upon any successors or assigns of the
         Company. This Warrant will be construed and enforced in accordance with
         and governed by the laws of the State of New York, except for matters
         arising under the Act, without reference to principles of conflicts of
         law. Each of the parties consents to the exclusive jurisdiction of the
         FEDERAL AND STATE CourtS sitting in the COUNTY of New York in the State
         of New York in connection with any dispute arising under this Warrant
         and hereby waives, to the maximum extent permitted by law, any
         objection, including any objection based on FORUM non CONVENIENS OR
         VENUE, to the bringing of any such proceeding in such jurisdiction.
         Each party hereby agrees that if the other party to this Warrant
         obtains a judgment against it in such a proceeding, the party which
         obtained such judgment may enforce same by summary judgment in the
         courts of any country having jurisdiction over the party against whom
         such judgment was obtained, and each party hereby waives any defenses
         available to it under local law and agrees to the enforcement of such a
         judgment. Each party to this Warrant irrevocably consents to the
         service of process in any such proceeding by the mailing of copies
         thereof by registered or certified mail, postage prepaid, to such party
         at its address in accordance with Section 18(c). Nothing herein shall
         affect the right of any party to serve process in any other manner
         permitted by law.
<PAGE>
                                                                         Page 12

(b)      MODIFICATION AND WAIVER. This Warrant and any provisions hereof may be
         changed, waived, discharged or terminated only by an instrument in
         writing signed by the party against which enforcement of the same is
         sought. Any amendment effected in accordance with this paragraph shall
         be binding upon the Investor, each future holder of this Warrant and
         the Company. No waivers of, or exceptions to, any term, condition or
         provision of this Warrant, in any one or more instances, shall be
         deemed to be, or construed as, a further or continuing waiver of any
         such term, condition or provision.

(c)      NOTICES. Any notice, request or other document required or permitted to
         be given or delivered to the Investor or future holders hereof or the
         Company shall be personally delivered or shall be sent by certified or
         registered mail, postage prepaid, to the Investor or each such holder
         at its address as shown on the books of the Company or to the Company
         at the address set forth in the Purchase Agreement. All notices under
         this Warrant shall be deemed to have been given when received.

         A party may from time to time change the address to which notices to it
         are to be delivered or mailed hereunder by notice in accordance with
         the provisions of this Section 18(c).

(d)      SEVERABILITY. Whenever possible, each provision of this Warrant shall
         be interpreted in such manner as to be effective and valid under
         applicable law, but if any provision of this Warrant is held to be
         invalid, illegal or unenforceable in any respect under any applicable
         law or rule in any jurisdiction, such invalidity, illegality or
         unenforceability shall not affect the validity, legality or
         enforceability of any other provision of this Warrant in such
         jurisdiction or affect the validity, legality or enforceability of any
         provision in any other jurisdiction, but this Warrant shall be
         reformed, construed and enforced in such jurisdiction as if such
         invalid, illegal or unenforceable provision had never been contained
         herein.

(e)      NO IMPAIRMENT. The Company will not, by amendment of its Certificate of
         Incorporation or through any reorganization, transfer of assets,
         consolidation, merger, dissolution, issue or sale of securities or any
         other voluntary action, avoid or seek to avoid the observance or
         performance of any of the terms of this Warrant, but will at all times
         in good faith assist in the carrying out of all such terms and in the
         taking of all such action as may be necessary or appropriate in order
         to protect the rights of the Holder against impairment. Without
         limiting the generality of the foregoing, the Company (a) will not
         increase the par value of any Warrant Shares above the amount payable
         therefor on such exercise, and (b) will take all such action as may be
         reasonably necessary or appropriate in order that the Company may
         validly and legally issue fully paid and nonassessable Warrant Shares
         on the exercise of this Warrant.

(f)      SPECIFIC ENFORCEMENT. The Company and the Holder acknowledge and agree
         that irreparable damage would occur in the event that any of the
         provisions of this Warrant were not performed in accordance with their
         specific terms or were otherwise breached. It is accordingly agreed
         that the parties shall he entitled to an injunction or injunctions to
         prevent or cure breaches of the provisions of this Warrant and to
         enforce specifically the terms and provisions hereof, this being in
         addition to any other remedy to which either of them may be entitled by
         law or equity.

<PAGE>
                                                                         Page 13

         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.

Dated: March 8, 2000

                                             NETGURU, INC.

                                             By: /s/ Jyoti Chatterjee
                                                 -------------------------------
                                                  Name:    Jyoti Chatterjee
                                                  Title:   President

ATTEST:

/s/ Wayne Blair
------------------------------
Wayne Blair

<PAGE>

                               NOTICE OF EXERCISE
                               ------------------

To:      NETGURU, INC.

(1) The undersigned hereby elects to exercise the attached Warrant for and to
purchase thereunder, ______ shares of Common Stock, [and herewith makes payment
therefor of $_______] or [and elects to utilize the cashless exercise provisions
of Section 3(b) of this Warrant, resulting in ______ shares of Common Stock
issuable hereunder].

(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                           -------------------------------
                           (Name)

                           -------------------------------
                           (Address)

                           -------------------------------

(3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:

                                                --------------------------------
                                                (Name)

--------------------                            --------------------------------
(Date)                                          (Signature)

                                                --------------------------------
                                                (Address)

Dated:

------------------------------
Signature

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

___________________________________________________________________________.

___________________________________________________________________________

                                                    Dated:  ______________,

                           Holder's Signature: _____________________________

                           Holder's Address:   _____________________________

                                               _____________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.

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