Document:

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EXHIBIT 4.2

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO NETGURU, INC., THAT SUCH REGISTRATION IS NOT REQUIRED.

                                CONVERTIBLE NOTE
                                ----------------

         FOR VALUE RECEIVED, NETGURU, INC., a Delaware corporation (hereinafter
called the "BORROWER"), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o
Ironshore Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate House, South
Church Street, Grand Cayman, Cayman Islands, Fax: 345-949-9877 (the "HOLDER") or
its registered assigns or successors in interest, on order, without demand, the
sum of One Million Four Hundred Thousand Dollars ($1,400,000), with any accrued
and unpaid interest on December 4, 2006 (the "MATURITY DATE"). Capitalized terms
used herein without definition shall have the meanings ascribed to such terms in
the Purchase Agreement (as defined in Section 3.1(a) below). The Borrower
previously borrowed $900,000 (the "PRIOR OUTSTANDING LOAN") from the Holder
pursuant to that certain $4,000,000 Secured Convertible Note dated July 31, 2003
(the "JULY 2003 NOTE"). Such Prior Outstanding Loan is to become an obligation
of Borrower to Holder under this Convertible Note with such obligation canceled
under the July 2003 Note.

         The following terms shall apply to this Note:

                                    ARTICLE I

                                    INTEREST

         1.1 INTEREST RATE. Interest payable on this Note shall accrue at an
interest rate per annum equal to the greater of the "prime rate" published in
the Wall Street Journal from time to time plus one percent (1.0%) and five
percent (5%) and be payable in arrears commencing January 1, 2004 and on the
first business day of each consecutive calendar month thereafter, and on the
Maturity Date, accelerated or otherwise, due and payable as described below.

         1.2 PAYMENT GRACE PERIOD. The Borrower shall have a four (4) day grace
period to pay any monetary amounts due under this Note. During this grace
period, and thereafter until paid, a default interest rate of five percent (5%)
per annum above the then applicable interest rate hereunder shall apply to the
amounts owed hereunder.

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                                   ARTICLE II

                                  AMORTIZATION

         2.1 MONTHLY PAYMENTS. Subject to the terms of this Article II,
beginning April 1, 2004, and thereafter on the first day of each succeeding
calendar month until the Maturity Date (each, a "REPAYMENT DATE"), the Borrower
shall repay the sum of thirty thousand dollars (to the extent such amount has
not been converted pursuant to Article III below), together with interest
accrued to date on such portion of the original principal amount plus any and
all default payments owing under the Purchase Agreement but not previously paid
(collectively the "MONTHLY AMOUNT"), in accordance with Section 2.2 below;
provided, however, that if the Borrower's Registration Statement with respect to
the shares of Common Stock issuable upon conversion of this Note is declared
effective by the Securities and Exchange Commission prior to ninety (90) days
from the date hereof, then the payment the principal portion of the Monthly
Amount shall commence on the first business day of each consecutive calendar
month, beginning on the first such day which occurs following ninety (90) days
from the date hereof.

         2.2 CASH OR COMMON STOCK. Subject to the terms hereof, the Borrower has
the sole option to determine whether to satisfy payment of the Monthly Amount in
full on each Repayment Date either in cash or in shares of Common Stock, or a
combination of both. The Borrower shall deliver to the Holder a written
irrevocable notice in the form of Exhibit B attached hereto electing to pay such
Monthly Amount in full on such Repayment Date in either cash or Common Stock, or
a combination of both ("REPAYMENT ELECTION NOTICE"). Such Repayment Election
Notice shall be delivered to the Holder at least twenty (20) days prior to the
applicable Repayment Date (the date of such notice being hereinafter referred to
as the "NOTICE DATE"). If such Repayment Election Notice is not delivered within
the prescribed period set forth in the preceding sentence, then the repayment
shall be made in cash. If the Borrower repays all or a portion of the Monthly
Amount in shares of Common Stock, the number of such shares to be issued for
such Repayment Date shall be the number determined by dividing (x) the portion
of the Monthly Amount to be paid in shares of Common Stock, by (y) the
Conversion Price (as defined herein) as of such date.

         2.3 NO EFFECTIVE REGISTRATION. Notwithstanding anything to the contrary
herein, the Borrower shall be prohibited from exercising its right to repay the
Monthly Amount in shares of Common Stock (and must deliver cash in respect
thereof) on the applicable Repayment Date if at any time from the Notice Date
until the time at which the Holder receives such shares, there fails to exist an
effective registration statement or an Event of Default hereunder exists or
occurs, unless otherwise waived in writing by the Holder in whole or in part at
the Holder's option.

         2.4 SHARE PRICE/ISSUANCE LIMITATIONS. Notwithstanding anything to the
contrary herein, if the average closing price of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market for the 10 trading days preceding a
Repayment Date was less than 110% of the Fixed Conversion Price, and the
Borrower has previously elected to pay all or a portion of the Monthly Amount in
shares of Common Stock, then the Borrower, in its sole discretion, shall
determine whether (i) to pay the Monthly Amount in cash; or (ii) require the
Holder to convert all or part of the Monthly Amount that is payable in shares of
Common Stock at a Conversion Price of 85% of the average of the three lowest
closing prices during the twenty (20) trading days immediately preceding the
Conversion Date. Any part of the Monthly Amount not converted into shares of
Common Stock by the following Repayment Date shall be paid by the Borrower in
cash on such following Repayment Date. At any time during the relevant month,
the Borrower has the option to pay the Monthly Amount, or the unconverted part
thereof, in cash and the Conversion Price set forth in this Section 2.4 shall no
longer be applicable.

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         2.5 DEEMED CONVERSIONS. Any repayment of the Monthly Amount in shares
of Common Stock pursuant to the terms hereof shall constitute and be deemed a
conversion of such portion of the applicable principal amount of this Note for
all purposes under this Note and the Purchase Agreement (except as otherwise
provided herein).

         2.6 DEEMED OWNERSHIP. In the case of the exercise of the conversion
rights or payment of the Monthly Amount set forth herein the conversion
privilege shall be deemed to have been exercised and the shares of Common Stock
issuable upon such conversion or Repayment shall be deemed to have been issued
upon the date of receipt by the Borrower of the Notice of Conversion or
Repayment Election Notice, as the case may be. The person or entity entitled to
receive Common Stock issuable upon such conversion shall, on the date such
conversion privilege is deemed to have been exercised and thereafter, be treated
for all purposes as the record holder of such Common Stock.

                                   ARTICLE III

                                CONVERSION RIGHTS

         3.1. CONVERSION INTO THE BORROWER'S COMMON STOCK.

         (a) Subject to the provisions set forth above, the Holder shall have
the right, but not the obligation, from and after the date hereof, and then at
any time until this Note is fully paid, to convert the principal portion of this
Note and/or interest and fees due and payable into fully paid and nonassessable
shares of common stock of the Borrower as such stock exists on the date of
issuance of this Note, or any shares of capital stock of the Borrower into which
such stock shall hereafter be changed or reclassified (the "COMMON STOCK") at
the conversion price set forth below (the "CONVERSION PRICE"). Notwithstanding
the foregoing, the Holder will not be permitted to convert on any Conversion
Date (as defined below) an amount of shares having a dollar value exceeding 25%
of the aggregate dollar trading volume during the 30 trading days preceding such
Conversion Date.

         Upon delivery to the Borrower of a Notice of Conversion as described in
Section 8 of the Securities Purchase Agreement entered into between the Borrower
and the Holder relating to this Note (the "PURCHASE AGREEMENT") of the Holder's
written request for conversion (the date of giving such notice of conversion
being a "CONVERSION DATE"), the Borrower shall issue and deliver to the Holder
within three business days from the Conversion Date that number of shares of
Common Stock for the portion of the Note converted in accordance with the
foregoing. The number of shares of Common Stock to be issued upon each
conversion of this Note shall be determined by dividing that portion of the
principal of the Note to be converted and interest, if any, by the Fixed

                                       3
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Conversion Price as of the Conversion Date. In the event of any conversions of
outstanding principal amount under this Note in part pursuant to this Article
III, such conversions shall be deemed to constitute conversions of outstanding
principal amount applying to Monthly Amounts for the Repayment Dates in
chronological order. By way of example, if the original principal amount of this
Note is $1,400,000 and the Holder converted $75,000 of such original principal
amount prior to the first Repayment Date, then (1) the principal amount of the
Monthly Amount due on the first Repayment Date would equal $0, (2) the principal
amount of the Monthly Amount due on the second Repayment Date would equal $0 and
(3) the principal amount of the Monthly Amount due on each of the remaining
Repayment Dates would be $15,000.

         (b) Subject to adjustment as provided in Section 3.1(c) hereof, the
Conversion Price per share shall be $1.30 (the "FIXED CONVERSION PRICE"). If an
Event of Default has occurred and be continuing hereunder then the Conversion
Price shall be equal to the lower of (i) the Fixed Conversion Price; or (ii)
seventy percent (70%) of the average of the three lowest closing prices for the
Common Stock on NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National
Market System, American Stock Exchange, or New York Stock Exchange (whichever of
the foregoing is at the time the principal trading exchange or market for the
Common Stock, the "PRINCIPAL MARKET"), or on any securities exchange or other
securities market on which the Common Stock is then being listed or traded, for
the thirty (30) trading days prior to but not including the Conversion Date.

         (c) The Conversion Price and number and kind of shares or other
securities to be issued upon conversion determined pursuant to Section 3.1(a)
and 3.1(b), shall be subject to adjustment from time to time upon the happening
of certain events while this conversion right remains outstanding, as follows:

                  A. Merger, Sale of Assets, etc. If the Borrower at any time
shall consolidate with or merge into or sell or convey all or substantially all
its assets to any other corporation, this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be deemed to
evidence the right to purchase such number and kind of shares or other
securities and property as would have been issuable or distributable on account
of such consolidation, merger, sale or conveyance, upon or with respect to the
number of shares of Common Stock the Holder could have acquired immediately
prior to such consolidation, merger, sale or conveyance based on the Fixed
Conversion Price or the Conversion Price, as the case may be, as of the closing
date thereof. The foregoing provision shall similarly apply to successive
transactions of a similar nature by any such successor or purchaser. Without
limiting the generality of the foregoing, the provisions of this Section shall
apply to such securities of such successor or purchaser after any such
consolidation, merger, sale or conveyance.

                  B. Reclassification, etc. If the Borrower at any time shall,
by reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid principal portion thereof and accrued interest thereon, shall thereafter
be deemed to evidence the right to purchase an adjusted number of such
securities and kind of securities as would have been issuable as the result of
such change with respect to the number of shares of Common Stock into which the
Note would have been convertible immediately prior to such reclassification or
other change at the Fixed Conversion Price or the Conversion Price, as the case
may be, as of the effective date for such reclassification or change.

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                  C. Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock in shares
of Common Stock, the Fixed Conversion Price or the Conversion Price, as the case
may be, shall be proportionately reduced in case of subdivision of shares or
stock dividend or proportionately increased in the case of combination of
shares, in each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event.

                  D. Share Issuance. Subject to the provisions of this Section,
if the Borrower at any time shall issue any shares of Common Stock prior to the
conversion of the entire principal amount of the Note (otherwise than as: (i)
provided in Sections 3.1(c)A, 3.1(c)B or 3.1(c)C or this subparagraph D; (ii)
pursuant to warrants or options that may be granted in the future under any
option plan of the Borrower, or any employment agreement, joint venture, credit,
leasing or other financing agreement or any joint venture or other strategic
arrangement, in each case now or hereinafter entered into by the Borrower; (iii)
pursuant to any agreement entered into by the Company or any of its subsidiaries
for the acquisition of another business (whether by stock purchase or asset
purchase, merger or otherwise; or (iv) for services rendered by consultants;
((i), (ii), (iii) and (iv) above, are hereinafter referred to as the "EXCLUDED
ISSUANCES")) for a consideration less than the Fixed Conversion Price that would
be in effect at the time of such issue, then, and thereafter successively upon
each such issue, the Fixed Conversion Price shall be reduced as follows: (i) the
number of shares of Common Stock outstanding immediately prior to such issue
shall be multiplied by the Fixed Conversion Price in effect at the time of such
issue and the product shall be added to the aggregate consideration, if any,
received by the Borrower upon such issue of additional shares of Common Stock;
and (ii) the sum so obtained shall be divided by the number of shares of Common
Stock outstanding immediately after such issue. The resulting quotient shall be
the adjusted Fixed Conversion Price. Except for the Excluded Issuances for
purposes of this adjustment, the issuance of any security of the Borrower
carrying the right to convert such security into shares of Common Stock or of
any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Fixed Conversion Price upon the issuance of shares of Common
Stock upon exercise of such conversion or purchase rights.

         (d) During the period the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the full conversion of
this Note. The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. The Borrower agrees that its
issuance of this Note shall constitute full authority to its officers, agents,
and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.

         3.2 METHOD OF CONVERSION. This Note may be converted by the Holder in
whole or in part as described in Section 3.1(a) hereof and the Purchase
Agreement. Upon partial conversion of this Note, a new Note containing the same
date and provisions of this Note shall, at the request of the Holder, be issued
by the Borrower to the Holder for the principal balance of this Note and
interest which shall not have been converted or paid.

                                       5
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         3.3 REQUIRED CONVERSION. The Borrower may, at its sole option, provide
the Holder irrevocable written notice ("CALL NOTICE") requiring the conversion
of all or a portion of the Note held by such Holder as of the date set forth in
such Call Notice (the "CALL DATE"), which such date shall be at least 30 days
following the date of the Call Notice, provided a registration statement
covering resales of that number of shares of Common Stock then issuable upon
conversion of this Note pursuant to such Call Notice has been declared effective
and is available for use. The amount of Common Stock to be issued in connection
with any such conversion pursuant to a particular Call Notice pursuant to this
Section 3.3 shall not exceed 20% of the aggregate dollar trading volume of the
Common Stock for the 22 trading days immediately preceding the date of such Call
Notice. If all of the conditions described herein have been satisfied, no amount
(either principal, interest or fees) shall be payable after the Call Date with
respect to the portion of the Note so converted and the Borrower will cause a
certificate representing the shares of Common Stock so converted to be issued to
the Holder upon receipt of a completed Notice of Conversion as provided herein.
The conversion price with respect to conversions pursuant to this Section 3.3
shall equal the lesser of (i) the Fixed Conversion Price and (ii) 90% of the
average of the fifteen closing prices for the Common Stock on the Principal
Market during the period immediately preceding the Call Date.

                                   ARTICLE IV

                                EVENT OF DEFAULT

         The occurrence of any of the following events is an Event of Default
("EVENT OF DEFAULT"):

         4.1 FAILURE TO PAY PRINCIPAL, INTEREST OR OTHER FEES. The Borrower
fails to pay any installment of principal, interest or other fees hereon or on
any other promissory note issued pursuant to the Purchase Agreement and this
Note, when due and such failure continues for a period of four (4) days after
the due date (this is the same four day period in Section 1.2 above).

         4.2 BREACH OF COVENANT. The Borrower breaches any material covenant or
other term or condition of this Note or the Purchase Agreement in any material
respect and such breach, if subject to cure, continues for a period of thirty
(30) days after written notice to the Borrower from the Holder.

         4.3 BREACH OF REPRESENTATIONS AND WARRANTIES. Any material
representation or warranty of the Borrower made herein, in the Purchase
Agreement, or in any agreement, statement or certificate given in writing
pursuant hereto or in connection therewith shall be false or misleading and
shall not be cured for a period of thirty (30) days after written notice thereof
is received by the Borrower from the Holder.

         4.4 RECEIVER OR TRUSTEE. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.

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         4.5 JUDGMENTS. Any money judgment, writ or similar final process shall
be entered or filed against the Borrower or any of its property or other assets
for more than $250,000, and shall remain unvacated, unbonded or unstayed for a
period of ninety (90) days.

         4.6 BANKRUPTCY. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower.

         4.7 STOP TRADE. An SEC stop trade order or Principal Market trading
suspension of the Common Stock for 5 consecutive days or 5 days during a period
of 10 consecutive days, excluding in all cases a suspension of all trading on a
Principal Market.

         4.8 DEFAULT UNDER RELATED AGREEMENT. An Event of Default occurs under
and as defined in the Security Agreement dated as of the date hereof between
Borrower and Holder, as such agreement may be amended, modified and supplemented
from time to time.

         4.9 FAILURE TO DELIVER COMMON STOCK OR REPLACEMENT NOTE. The Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note.

         If an Event of Default occurs and is continuing, the Holder may make
all sums of principal, interest and other fees then remaining unpaid hereon and
all other amounts payable hereunder immediately due and payable, all without
demand, presentment or notice, or grace period, all of which hereby are
expressly waived. In the event of an acceleration, the amount due and owing to
the Holder shall be 125% of the outstanding principal amount of the Note (plus
accrued and unpaid interest and fees, if any).

                                    ARTICLE V

                                  MISCELLANEOUS

         5.1 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part
of the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

         5.2 NOTICES. Any notice herein required or permitted to be given shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
Borrower at the address as set forth on the signature page to the Purchase
Agreement executed in connection herewith, with a copy to Richardson & Patel,
LLP, attn: Nimish Patel, Esq., 10900 Wilshire Boulevard, Suite 500, Los Angeles,
California 90024, facsimile number (310) 208-1154, and to the Holder at the
address set forth on the signature page to the Purchase Agreement for such
Holder, with a copy to John Tucker, Esq., 825 Third Street, 14th Floor, New
York, New York 10022, facsimile number (212) 541-4434, or at such other address
as the Borrower or the Holder may designate by ten days advance written notice
to the other parties hereto. A Notice of Conversion shall be deemed given when
made to the Borrower pursuant to the Purchase Agreement.

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         5.3 AMENDMENT PROVISION. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.

         5.4 ASSIGNABILITY. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder.

         5.5 GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York; provided, however that the Holder may choose to waive this provision
and bring an action outside the state of New York. Both parties and the
individual signing this Note on behalf of the Borrower agree to submit to the
jurisdiction of such courts. The prevailing party shall be entitled to recover
from the other party its reasonable attorney's fees and costs. In the event that
any provision of this Note is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or unenforceability of
any other provision of this Note.

         5.6 MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

         5.7 SECURITY INTEREST. The holder of this Note has been granted a
security interest in the assets of the Borrower more fully described in a
Security Agreement.

         5.8 CONSTRUCTION. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

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         IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in
its name effective as of this 4th day of December 2003.

                                              NETGURU, INC.

                                              By:/s/ Sanatanu Das

WITNESS:

_______________________________

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                              NOTICE OF CONVERSION
                              --------------------

(To be executed by the Holder in order to convert the Note)

         The undersigned hereby elects to convert $_________ of the principal
and $_________ of the interest due on the Note issued by NETGURU, INC. on
December ___, 2003 into Shares of Common Stock of NETGURU, INC. (the "Company")
according to the conditions set forth in such Note, as of the date written
below.

Date of Conversion:_____________________________________________________________

Conversion Price:_______________________________________________________________

Shares To Be Delivered:_________________________________________________________

Signature:______________________________________________________________________

Print Name:_____________________________________________________________________

Address:________________________________________________________________________

        ________________________________________________________________________

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                                    EXHIBIT B

                        FORM OF REPAYMENT ELECTION NOTICE

To:      [HOLDER AT HOLDER'S ADDRESS]

         Pursuant to Section 2.2 of the Note of netGuru, Inc. issued on December
__, 2003, we hereby notify you that we are irrevocably electing to repay the
outstanding Monthly Amount (as defined in the Note) due on the Repayment Date
(as defined in the Note) which occurs on ______, 20__ (CHECK ONE):

         _____    In full in cash on such Repayment Date.

         _____    In full in shares of the Company's Common Stock within three
                  (3) trading days following such Repayment Date.

         _____    In part in cash in the amount of $______ on such Repayment
                  Date, and in part in shares of the Company's Common Stock (in
                  the amount of ______ shares) within three (3) trading days
                  following such Repayment Date.

         ________ In shares, but the Hodler will be permitted to convert up to
                  the Monthly Amount that is payable in shares of Common Stock
                  during the period until the next Repayment Date.

                                            Netguru, Inc.

                                            By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       11<PAGE>

EXHIBIT 4.3

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (this "Agreement") is made and
entered into as of December 4, 2003, by and between NetGuru, Inc., a Delaware
corporation (the "Company"), and Laurus Master Fund, Ltd. (the "Purchaser").

         This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, by and between the Purchaser and the Company (the
"Securities Purchase Agreement"), and pursuant to the Note referred to therein.

         The Company and the Purchaser hereby agree as follows:

         1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Securities Purchase Agreement shall have the meanings
given such terms in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:

                  "COMMISSION" means the Securities and Exchange Commission.

                  "COMMON STOCK" means shares of the Company's common stock, par
value $0.01 per share.

                  "EFFECTIVENESS DATE" means the 120th day following the Filing
Date.

                  "EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 2(a).

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any successor statute.

                  "FILING DATE" means, with respect to the Registration
Statement required to be filed hereunder, a date no later than January 15, 2004.

                  "HOLDER" or "HOLDERS" means the Purchaser or any of its
affiliates or transferees to the extent any of them hold Registrable Securities.

                  "INDEMNIFIED PARTY" shall have the meaning set forth in
Section 5(c).

                  "INDEMNIFYING PARTY" shall have the meaning set forth in
Section 5(c).

                                       1
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                  "NOTE" has the meaning set forth in the Securities Purchase
Agreement.

                  "PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

                  "PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

                  "REGISTRABLE SECURITIES" means the shares of Common Stock
issued upon the conversion of the Note.

                  "REGISTRATION STATEMENT" means each registration statement
required to be filed hereunder, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.

                  "RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "RULE 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                                       2
<PAGE>

                  "SECURITIES ACT" means the Securities Act of 1933, as amended,
and any successor statute.

                  "SECURITIES PURCHASE AGREEMENT" means the agreement between
the parties hereto calling for the issuance by the Company of a $1,900,000
convertible Note.

                  "TRADING MARKET" means any of the NASD OTC Bulletin Board,
NASDAQ SmallCap Market, the Nasdaq National Market, the American Stock Exchange
or the New York Stock Exchange.

         2. REGISTRATION.

                  (a) On or prior to the Filing Date, the Company shall prepare
         and file with the Commission a Registration Statement covering the
         Registrable Securities for an offering to be made on a continuous basis
         pursuant to Rule 415. The Registration Statement shall be on Form S-B2
         or Form S-3 (except if the Company is not then eligible to register for
         resale the Registrable Securities on Form S-B2 or Form S-3, in which
         case such registration shall be on another appropriate form in
         accordance herewith). The Company shall cause the Registration
         Statement to become effective and remain effective as provided herein.
         The Company shall use its reasonable commercial efforts to cause the
         Registration Statement to be declared effective under the Securities
         Act as promptly as possible after the filing thereof, but in any event
         no later than the Effectiveness Date. The Company shall use its
         reasonable commercial efforts to keep the Registration Statement
         continuously effective under the Securities Act until the date which is
         the earlier date of when (i) all Registrable Securities have been sold
         or (ii) all Registrable Securities may be sold immediately without
         registration under the Securities Act and without volume restrictions
         pursuant to Rule 144(k), as determined by the counsel to the Company
         pursuant to a written opinion letter to such effect, addressed and
         acceptable to the Company's transfer agent and the affected Holders
         (the "Effectiveness Period").

                  (b) If: (i) the Registration Statement is not filed on or
         prior to the Filing Date; (ii) the Registration Statement is not
         declared effective by the Commission by the Effectiveness Date; (iii)
         after the Registration Statement is filed with and declared effective
         by the Commission, the Registration Statement ceases to be effective

                                       3
<PAGE>

         (by suspension or otherwise) as to all Registrable Securities to which
         it is required to relate at any time prior to the expiration of the
         Effectiveness Period (without being succeeded immediately by an
         additional registration statement filed and declared effective) for a
         period of time which shall exceed 30 days in the aggregate per year or
         more than 20 consecutive calendar days (defined as a period of 365 days
         commencing on the date the Registration Statement is declared
         effective); or (iv) the Common Stock is not listed or quoted, or is
         suspended from trading on any Trading Market for a period of three (3)
         consecutive Trading Days (provided the Company shall not have been able
         to cure such trading suspension within 30 days of the notice thereof or
         list the Common Stock on another Trading Market); (any such failure or
         breach being referred to as an "Event," and for purposes of clause (i)
         or (ii) the date on which such Event occurs, or for purposes of clause
         (iii) the date which such 30 day or 20 consecutive day period (as the
         case may be) is exceeded, or for purposes of clause (iv) the date on
         which such three (3) Trading Day period is exceeded, being referred to
         as "Event Date"), then until the applicable Event is cured, the Company
         shall pay to each Holder an amount in cash, as liquidated damages and
         not as a penalty, equal to 1.0% for each thirty (30) day period
         (prorated for partial periods) on a daily basis of the original
         principal amount of the Note. While such Event continues, such
         liquidated damages shall be paid not less often than each thirty (30)
         days. Any unpaid liquidated damages as of the date when an Event has
         been cured by the Company shall be paid within five (5) days following
         the date on which such Event has been cured by the Company.

                  (c) Within three business days of the Effectiveness Date, the
         Company shall cause its counsel to issue a blanket opinion in the form
         attached hereto as Exhibit A, to the transfer agent stating that the
         shares are subject to an effective registration statement and can be
         reissued free of restrictive legend upon notice of a sale by Laurus and
         confirmation by Laurus that it has complied with the prospectus
         delivery requirements, provided that the Company has not advised the
         transfer agent orally or in writing that the opinion has been
         withdrawn. Copies of the blanket opinion required by this Section 2(c)
         shall be delivered to Laurus within the time frame set forth above.

         3. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions hereof to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:

                                       4
<PAGE>

                  (a) prepare and file with the Commission the Registration
         Statement with respect to such Registrable Securities, respond as
         promptly as possible to any comments received from the Commission, and
         use its best efforts to cause the Registration Statement to become and
         remain effective for the Effectiveness Period with respect thereto, and
         promptly provide to the Purchaser copies of all filings and Commission
         letters of comment relating thereto;

                  (b) prepare and file with the Commission such amendments and
         supplements to the Registration Statement and the Prospectus used in
         connection therewith as may be necessary to comply with the provisions
         of the Securities Act with respect to the disposition of all
         Registrable Securities covered by the Registration Statement and to
         keep such Registration Statement effective until the expiration of the
         Effectiveness Period;

                  (c) furnish to the Purchaser such number of copies of the
         Registration Statement and the Prospectus included therein (including
         each preliminary Prospectus) as the Purchaser reasonably may request to
         facilitate the public sale or disposition of the Registrable Securities
         covered by the Registration Statement;

                  (d) use its commercially reasonable efforts to register or
         qualify the Purchaser's Registrable Securities covered by the
         Registration Statement under the securities or "blue sky" laws of such
         jurisdictions within the United States as the Purchaser may reasonably
         request, provided, however, that the Company shall not for any such
         purpose be required to qualify generally to transact business as a
         foreign corporation in any jurisdiction where it is not so qualified or
         to consent to general service of process in any such jurisdiction;

                  (e) list the Registrable Securities covered by the
         Registration Statement with any securities exchange on which the Common
         Stock of the Company is then listed;

                  (f) immediately notify the Purchaser at any time when a
         Prospectus relating thereto is required to be delivered under the
         Securities Act, of the happening of any event of which the Company has
         knowledge as a result of which the Prospectus contained in such
         Registration Statement, as then in effect, includes an untrue statement
         of a 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

                                       5
<PAGE>

                  (g) make available for inspection by the Purchaser and any
         attorney, accountant or other agent retained by the Purchaser, all
         publicly available, non-confidential financial and other records,
         pertinent corporate documents and properties of the Company, and cause
         the Company's officers, directors and employees to supply all publicly
         available, non-confidential information reasonably requested by the
         attorney, accountant or agent of the Purchaser.

         4. REGISTRATION EXPENSES. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (to the extent such counsel is required due to Company's
failure to meet any of its obligations hereunder), are called "Registration
Expenses". All selling commissions applicable to the sale of Registrable
Securities, including any fees and disbursements of any special counsel to the
Holders beyond those included in Registration Expenses, are called "Selling
Expenses." The Company shall only be responsible for all Registration Expenses.

         5. INDEMNIFICATION.

                  (a) In the event of a registration of any Registrable
         Securities under the Securities Act pursuant to this Agreement, the
         Company will indemnify and hold harmless the Purchaser, and its
         officers, directors and each other person, if any, who controls the
         Purchaser within the meaning of the Securities Act, against any losses,
         claims, damages or liabilities, joint or several, to which the
         Purchaser, or such persons may become subject under the Securities Act
         or otherwise, insofar as such losses, claims, damages or liabilities
         (or actions in respect thereof) arise out of or are based upon any
         untrue statement or alleged untrue statement of any material fact
         contained in any Registration Statement under which such Registrable
         Securities were registered under the Securities Act pursuant to this
         Agreement, any preliminary Prospectus or final Prospectus contained
         therein, or any amendment or supplement thereof, or arise out of or are
         based upon the omission or alleged omission to state therein a material
         fact required to be stated therein or necessary to make the statements
         therein not misleading, and will reimburse the Purchaser, and each such
         person for any reasonable legal or other expenses incurred by them in
         connection with investigating or defending any such loss, claim,
         damage, liability or action; provided, however, that the Company will

                                       6
<PAGE>

         not be liable in any such case if and to the extent that any such loss,
         claim, damage or liability arises out of or is based upon an untrue
         statement or alleged untrue statement or omission or alleged omission
         so made in conformity with information furnished by or on behalf of the
         Purchaser or any such person in writing specifically for use in any
         such document.

                  (b) In the event of a registration of the Registrable
         Securities under the Securities Act pursuant to this Agreement, the
         Purchaser will indemnify and hold harmless the Company, and its
         officers, directors and each other person, if any, who controls the
         Company within the meaning of the Securities Act, against all losses,
         claims, damages or liabilities, joint or several, to which the Company
         or such persons may become subject under the Securities Act or
         otherwise, insofar as such losses, claims, damages or liabilities (or
         actions in respect thereof) arise out of or are based upon any untrue
         statement or alleged untrue statement of any material fact which was
         furnished in writing by the Purchaser to the Company expressly for use
         in (and such information is contained in) the Registration Statement
         under which such Registrable Securities were registered under the
         Securities Act pursuant to this Agreement, any preliminary Prospectus
         or final Prospectus contained therein, or any amendment or supplement
         thereof, or arise out of or are based upon the omission or alleged
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading, and will
         reimburse the Company and each such person for any reasonable legal or
         other expenses incurred by them in connection with investigating or
         defending any such loss, claim, damage, liability or action, provided,
         however, that the Purchaser will be liable in any such case if and only
         to the extent that any such loss, claim, damage or liability arises out
         of or is based upon an untrue statement or alleged untrue statement or
         omission or alleged omission so made in conformity with information
         furnished in writing to the Company by or on behalf of the Purchaser
         specifically for use in any such document. Notwithstanding the
         provisions of this paragraph, the Purchaser shall not be required to
         indemnify any person or entity in excess of the amount of the aggregate
         net proceeds received by the Purchaser in respect of Registrable
         Securities in connection with any such registration under the
         Securities Act.

                  (c) Promptly after receipt by a party entitled to claim
         indemnification hereunder (an "Indemnified Party") of notice of the
         commencement of any action, such Indemnified Party shall, if a claim

                                       7
<PAGE>

         for indemnification in respect thereof is to be made against a party
         hereto obligated to indemnify such Indemnified Party (an "Indemnifying
         Party"), notify the Indemnifying Party in writing thereof, but the
         omission so to notify the Indemnifying Party shall not relieve it from
         any liability which it may have to such Indemnified Party other than
         under this Section 5(c) and shall only relieve it from any liability
         which it may have to such Indemnified Party under this Section 5(c) if
         and to the extent the Indemnifying Party is prejudiced by such
         omission. In case any such action shall be brought against any
         Indemnified Party and it shall notify the Indemnifying Party of the
         commencement thereof, the Indemnifying Party shall be entitled to
         participate in and, to the extent it shall wish, to assume and
         undertake the defense thereof with counsel satisfactory to such
         Indemnified Party, and, after notice from the Indemnifying Party to
         such Indemnified Party of its election so to assume and undertake the
         defense thereof, the Indemnifying Party shall not be liable to such
         Indemnified Party under this Section 5(c) for any legal expenses
         subsequently incurred by such Indemnified Party in connection with the
         defense thereof; if the Indemnified Party retains its own counsel, then
         the Indemnified Party shall pay all fees, costs and expenses of such
         counsel, provided, however, that, if the defendants in any such action
         include both the indemnified party and the Indemnifying Party and the
         Indemnified Party shall have reasonably concluded that there may be
         reasonable defenses available to it which are different from or
         additional to those available to the Indemnifying Party or if the
         interests of the Indemnified Party reasonably may be deemed to conflict
         with the interests of the Indemnifying Party, the Indemnified Party
         shall have the right to select one separate counsel and to assume such
         legal defenses and otherwise to participate in the defense of such
         action, with the reasonable expenses and fees of such separate counsel
         and other expenses related to such participation to be reimbursed by
         the Indemnifying Party as incurred.

                  (d) In order to provide for just and equitable contribution in
         the event of joint liability under the Securities Act in any case in
         which either (i) the Purchaser, or any officer, director or controlling
         person of the Purchaser, makes a claim for indemnification pursuant to
         this Section 5(c) but it is judicially determined (by the entry of a
         final judgment or decree by a court of competent jurisdiction and the
         expiration of time to appeal or the denial of the last right of appeal)
         that such indemnification may not be enforced in such case
         notwithstanding the fact that this Section 5(c) provides for
         indemnification in such case, or (ii) contribution under the Securities
         Act may be required on the part of the Purchaser or such officer,
         director or controlling person of the Purchaser in circumstances for

                                       8
<PAGE>

         which indemnification is provided under this Section 5(c); then, and in
         each such case, the Company and the Purchaser will contribute to the
         aggregate losses, claims, damages or liabilities to which they may be
         subject (after contribution from others) in such proportion so that the
         Purchaser is responsible only for the portion represented by the
         percentage that the public offering price of its securities offered by
         the Registration Statement bears to the public offering price of all
         securities offered by such Registration Statement, provided, however,
         that, in any such case, (A) the Purchaser will not be required to
         contribute any amount in excess of the public offering price of all
         such securities offered by it pursuant to such Registration Statement;
         and (B) no person or entity guilty of fraudulent misrepresentation
         (within the meaning of Section 10(f) of the Act) will be entitled to
         contribution from any person or entity who was not guilty of such
         fraudulent misrepresentation.

         6. REPRESENTATIONS AND WARRANTIES.

                  (a) The Common Stock of the Company is registered pursuant to
         Section 12(b) or 12(g) of the Exchange Act and, except with respect to
         certain matters which the Company has disclosed to the Purchaser on
         Schedule 4.21 to the Securities Purchase Agreement, the Company has
         timely filed all proxy statements, reports, schedules, forms,
         statements and other documents required to be filed by it under the
         Exchange Act. The Company has filed (i) its Annual Report on Form 10-K
         for the fiscal year ended March 31, 2002 and (ii) its Quarterly Report
         on Form 10-Q for the fiscal quarters ended June 30, 2003 and September
         30, 2003 (collectively, the "SEC Reports"). Each SEC Report was, at the
         time of its filing, in substantial compliance with the requirements of
         its respective form and none of the SEC Reports, nor the financial
         statements (and the notes thereto) included in the SEC Reports, as of
         their respective filing dates, contained any untrue statement of a
         material fact or omitted to state a material fact required to be stated
         therein or necessary to make the statements therein, in light of the
         circumstances under which they were made, not misleading. The financial
         statements of the Company included in the SEC Reports comply as to form
         in all material respects with applicable accounting requirements and
         the published rules and regulations of the Commission or other
         applicable rules and regulations with respect thereto. Such financial
         statements have been prepared in accordance with generally accepted
         accounting principles ("GAAP") applied on a consistent basis during the
         periods involved (except (i) as may be otherwise indicated in such
         financial statements or the notes thereto or (ii) in the case of
         unaudited interim statements, to the extent they may not include

                                       9
<PAGE>

         footnotes or may be condensed) and fairly present in all material
         respects the financial condition, the results of operations and the
         cash flows of the Company and its subsidiaries, on a consolidated
         basis, as of, and for, the periods presented in each such SEC Report.

                  (b) The Common Stock is listed for trading on the Nasdaq
         SmallCap Market and satisfies all requirements for the continuation of
         such listing. The Company has not received any notice that its Common
         Stock will be delisted from the Nasdaq SmallCap Market (except for
         prior notices which have been fully remedied) or that the Common Stock
         does not meet all requirements for the continuation of such listing.

                  (c) Neither the Company, nor any of its affiliates, nor any
         person acting on its or their behalf, has directly or indirectly made
         any offers or sales of any security or solicited any offers to buy any
         security under circumstances that would cause the offering of the
         Securities pursuant to the Securities Purchase Agreement to be
         integrated with prior offerings by the Company for purposes of the
         Securities Act which would prevent the Company from selling the Common
         Stock pursuant to Rule 506 under the Securities Act, or any applicable
         exchange-related stockholder approval provisions, nor will the Company
         or any of its affiliates or subsidiaries take any action or steps that
         would cause the offering of the Securities to be integrated with other
         offerings.

                  (d) The Note and the shares of Common Stock which the
         Purchaser may acquire pursuant to the Note are all restricted
         securities under the Securities Act as of the date of this Agreement.
         The Company will not issue any stop transfer order or other order
         impeding the sale and delivery of any of the Registrable Securities at
         such time as such Registrable Securities are registered for public sale
         or an exemption from registration is available, except as required by
         federal or state securities laws.

                  (e) The Company understands the nature of the Registrable
         Securities issuable upon the conversion of the Note and recognizes that
         the issuance of such Registrable Securities may have a potential
         dilutive effect. The Company specifically acknowledges that its
         obligation to issue the Registrable Securities is binding upon the
         Company and enforceable regardless of the dilution such issuance may
         have on the ownership interests of other shareholders of the Company.

                                       10
<PAGE>

                  (f) Except for agreements made in the ordinary course of
         business, there is no agreement that has not been filed with the
         Commission as an exhibit to a registration statement or to a form
         required to be filed by the Company under the Exchange Act, the breach
         of which could reasonably be expected to have a material and adverse
         effect on the Company and its subsidiaries, or would prohibit or
         otherwise interfere with the ability of the Company to enter into and
         perform any of its obligations under this Agreement in any material
         respect.

                  (g) The Company will at all times have authorized and reserved
         a sufficient number of shares of Common Stock for the full conversion
         of the Note.

         7. MISCELLANEOUS.

                  (a) REMEDIES. In the event of a breach by the Company or by a
         Holder, of any of their respective obligations under this Agreement,
         each Holder or the Company, as the case may be, in addition to being
         entitled to exercise all rights granted by law and under this
         Agreement, including recovery of damages, will be entitled to specific
         performance of its rights under this Agreement.

                  (b) NO PIGGYBACK ON REGISTRATIONS. Except as and to the extent
         specified in Schedule 7(b) hereto, neither the Company nor any of its
         security holders (other than the Holders in such capacity pursuant
         hereto) may include securities of the Company in any Registration
         Statement other than the Registrable Securities, and the Company shall
         not after the date hereof enter into any agreement providing any such
         right for inclusion of shares in the Registration Statement to any of
         its security holders. Except as and to the extent specified in Schedule
         7(b) hereto, the Company has not previously entered into any agreement
         granting any registration rights with respect to any of its securities
         to any Person that have not been fully satisfied.

                  (c) COMPLIANCE. Each Holder covenants and agrees that it will
         comply with the prospectus delivery requirements of the Securities Act
         as applicable to it in connection with sales of Registrable Securities
         pursuant to the Registration Statement.

                  (d) DISCONTINUED DISPOSITION. Each Holder agrees by its
         acquisition of such Registrable Securities that, upon receipt of a
         notice from the Company of the occurrence of a Discontinuation Event

                                       11
<PAGE>

         (as defined below), such Holder will forthwith discontinue disposition
         of such Registrable Securities under the applicable Registration
         Statement until such Holder's receipt of the copies of the supplemented
         Prospectus and/or amended Registration Statement or until it is advised
         in writing (the "Advice") by the Company that the use of the applicable
         Prospectus may be resumed, and, in either case, has received copies of
         any additional or supplemental filings that are incorporated or deemed
         to be incorporated by reference in such Prospectus or Registration
         Statement. The Company may provide appropriate stop orders to enforce
         the provisions of this paragraph. For purposes of this Section 7(d), a
         "Discontinuation Event" shall mean (i) when the Commission notifies the
         Company whether there will be a "review" of such Registration Statement
         and whenever the Commission comments in writing on such Registration
         Statement (the Company shall provide true and complete copies thereof
         and all written responses thereto to each of the Holders); (ii) any
         request by the Commission or any other Federal or state governmental
         authority for amendments or supplements to such Registration Statement
         or Prospectus or for additional information; (iii) the issuance by the
         Commission of any stop order suspending the effectiveness of such
         Registration Statement covering any or all of the Registrable
         Securities or the initiation of any Proceedings for that purpose; (iv)
         the receipt by the Company of any notification with respect to the
         suspension of the qualification or exemption from qualification of any
         of the Registrable Securities for sale in any jurisdiction, or the
         initiation or threatening of any Proceeding for such purpose; and/or
         (v) the occurrence of any event or passage of time that makes the
         financial statements included in such Registration Statement ineligible
         for inclusion therein or any statement made in such Registration
         Statement or Prospectus or any document incorporated or deemed to be
         incorporated therein by reference untrue in any material respect or
         that requires any revisions to such Registration Statement, Prospectus
         or other documents so that, in the case of such Registration Statement
         or Prospectus, as the case may be, it will not contain any untrue
         statement of a material fact or omit to state any material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.

                  (e) PIGGY-BACK REGISTRATIONS. If at any time during the
         Effectiveness Period there is not an effective Registration Statement
         covering all of the Registrable Securities and the Company shall
         determine to prepare and file with the Commission a registration
         statement relating to an offering for its own account or the account of
         others under the Securities Act of any of its equity securities, other

                                       12
<PAGE>

         than on Form S-4 or Form S-8 (each as promulgated under the Securities
         Act) or their then equivalents relating to equity securities to be
         issued solely in connection with any acquisition of any entity or
         business or equity securities issuable in connection with stock option
         or other employee benefit plans, then the Company shall send to each
         Holder written notice of such determination and, if within fifteen days
         after receipt of such notice, any such Holder shall so request in
         writing, the Company shall include in such registration statement all
         or any part of such Registrable Securities such holder requests to be
         registered to the extent the Company may do so without violating
         registration rights of others which exist as of the date of this
         Agreement, subject to customary underwriter cutbacks applicable to all
         holders of registration rights and subject to obtaining any required
         the consent of any selling stockholder(s) to such inclusion under such
         registration statement.

                  (f) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
         including the provisions of this sentence, may not be amended, modified
         or supplemented, and waivers or consents to departures from the
         provisions hereof may not be given, unless the same shall be in writing
         and signed by the Company and the Holders of the then outstanding
         Registrable Securities. Notwithstanding the foregoing, a waiver or
         consent to depart from the provisions hereof with respect to a matter
         that relates exclusively to the rights of certain Holders and that does
         not directly or indirectly affect the rights of other Holders may be
         given by Holders of at least a majority of the Registrable Securities
         to which such waiver or consent relates; provided, however, that the
         provisions of this sentence may not be amended, modified, or
         supplemented except in accordance with the provisions of the
         immediately preceding sentence.

                  (g) NOTICES. Any notice or request hereunder may be given to
         the Company or the Purchaser at the respective addresses set forth
         below or as may hereafter be specified in a notice designated as a
         change of address under this Section 7(g). Any notice or request
         hereunder shall be given by registered or certified mail, return
         receipt requested, hand delivery, overnight mail, Federal Express or
         other national overnight next day carrier (collectively, "Courier") or
         telecopy (confirmed by mail). Notices and requests shall be, in the
         case of those by hand delivery, deemed to have been given when
         delivered to any party to whom it is addressed, in the case of those by
         mail or overnight mail, deemed to have been given three (3) business
         days after the date when deposited in the mail or with the overnight
         mail carrier, in the case of a Courier, the next business day following

                                       13
<PAGE>

         timely delivery of the package with the Courier, and, in the case of a
         telecopy, when confirmed. The address for such notices and
         communications shall be as follows:

                  IF TO THE COMPANY:         NetGuru, Inc.
                                             22700 Savi Ranch Parkway
                                             Yorba Linda, CA 92887
                                             Attention: Chief Financial Officer
                                             Facsimile: (714) 974-4771

                                             WITH A COPY TO:
                                             Richardson & Patel, LLP
                                             10900 Wilshire Boulevard, Suite 500
                                             Los Angeles, CA 90024
                                             Attention: Nimish Patel, Esq.
                                             Facsimile: (310) 208-1154

                  IF TO A PURCHASER:         To the address set forth under such
                                             Purchaser name on the signature
                                             pages hereto.

                  IF TO ANY OTHER PERSON     To the address of such Holder as it
                  WHO IS THEN THE            appears in the stock transfer books
                  REGISTERED HOLDER:         of the Company

         or such other address as may be designated in writing hereafter in
         accordance with this Section 7(g) by such Person.

                  (h) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
         benefit of and be binding upon the successors and permitted assigns of
         each of the parties and shall inure to the benefit of each Holder. The
         Company may not assign its rights or obligations hereunder without the
         prior written consent of each Holder. Each Holder may assign their
         respective rights hereunder in the manner and to the Persons as
         permitted under the Notes and the Security Agreement with the prior
         written consent of the Company, which consent shall not be unreasonably
         withheld.

                                       14
<PAGE>

                  (i) EXECUTION AND COUNTERPARTS. This Agreement may be executed
         in any number of counterparts, each of which when so executed shall be
         deemed to be an original and, all of which taken together shall
         constitute one and the same Agreement. In the event that any signature
         is delivered by facsimile transmission, such signature shall create a
         valid binding obligation of the party executing (or on whose behalf
         such signature is executed) the same with the same force and effect as
         if such facsimile signature were the original thereof.

                  (j) GOVERNING LAW. All questions concerning the construction,
         validity, enforcement and interpretation of this Agreement shall be
         governed by and construed and enforced in accordance with the internal
         laws of the State of New York, without regard to the principles of
         conflicts of law thereof. Each party agrees that all Proceedings
         concerning the interpretations, enforcement and defense of the
         transactions contemplated by this Agreement shall be commenced
         exclusively in the state and federal courts sitting in the City of New
         York, Borough of Manhattan. Each party hereto hereby irrevocably
         submits to the exclusive jurisdiction of the state and federal courts
         sitting in the City of New York, Borough of Manhattan for the
         adjudication of any dispute hereunder or in connection herewith or with
         any transaction contemplated hereby or discussed herein, and hereby
         irrevocably waives, and agrees not to assert in any Proceeding, any
         claim that it is not personally subject to the jurisdiction of any such
         court, that such Proceeding is improper. Each party hereto hereby
         irrevocably waives personal service of process and consents to process
         being served in any such Proceeding by mailing a copy thereof via
         registered or certified mail or overnight delivery (with evidence of
         delivery) 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 contained
         herein shall be deemed to limit in any way any right to serve process
         in any manner permitted by law. Each party hereto hereby irrevocably
         waives, to the fullest extent permitted by applicable law, any and all
         right to trial by jury in any legal proceeding arising out of or
         relating to this Agreement or the transactions contemplated hereby. If
         either party shall commence a Proceeding to enforce any provisions of a
         Transaction Document, then the prevailing party in such Proceeding
         shall be reimbursed by the other party for its reasonable attorneys
         fees and other costs and expenses incurred with the investigation,
         preparation and prosecution of such Proceeding.

                                       15
<PAGE>

                  (k) CUMULATIVE REMEDIES. The remedies provided herein are
         cumulative and not exclusive of any remedies provided by law.

                  (l) SEVERABILITY. If any term, provision, covenant or
         restriction of this Agreement is held by a court of competent
         jurisdiction to be invalid, illegal, void or unenforceable, the
         remainder of the terms, provisions, covenants and restrictions set
         forth herein shall remain in full force and effect and shall in no way
         be affected, impaired or invalidated, and the parties hereto shall use
         their reasonable efforts to find and employ an alternative means to
         achieve the same or substantially the same result as that contemplated
         by such term, provision, covenant or restriction. It is hereby
         stipulated and declared to be the intention of the parties that they
         would have executed the remaining terms, provisions, covenants and
         restrictions without including any of such that may be hereafter
         declared invalid, illegal, void or unenforceable.

                  (m) HEADINGS. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

                                       16
<PAGE>

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

NETGURU, INC.                              LAURUS MASTER FUND, LTD.

By:     /s/ Santanu Das                    By:    /s/ David Grin
        -------------------------------           ------------------------------
Name:   SANTANU DAS                        Name:  DAVID GRIN
        -------------------------------           ------------------------------
Title:  Chief Operating Officer            Title: Director
        -------------------------------           ------------------------------

                                           ADDRESS FOR NOTICES:

                                           825 Third Avenue - 14th Floor
                                           New York, NY  10022
                                           Attention:  David Grin
                                           Facsimile:  212-541-4434

                                       17
<PAGE>

                                    EXHIBIT A

                                [Month __, 2003]

Transfer Agent

                  Re:   netGuru, Inc. Registration Statement on Form [S-3]
                        --------------------------------------------------

Ladies and Gentlemen:

         As counsel to netGuru, Inc. a Delaware corporation (the "Company"), we
have been requested to render our opinion to you in connection with the resale
by the individuals or entities listed on Schedule A attached hereto (the
"Selling Stockholders"), of an aggregate of [amount] shares (the "Shares") of
the Company's Common Stock.

         A Registration Statement on Form [S-3] under the Securities Act of
1933, as amended (the "Act"), with respect to the resale of the Shares was
declared effective by the Securities and Exchange Commission on [date]. Enclosed
is the Prospectus dated [date]. We understand that the Shares are to be offered
and sold in the manner described in the Prospectus.

         Based upon the foregoing, upon request by the Selling Stockholders at
any time while the registration statement remains effective, it is our opinion
that the Shares have been registered for resale under the Act and new
certificates evidencing the Shares upon their transfer or re-registration by the
Selling Stockholders may be issued without restrictive legend. We will advise
you if the registration statement is not available or effective at any point in
the future.

                                                     Very truly yours,

                                                     [Company counsel]

                                       18
<PAGE>

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

SELLING STOCKHOLDER                  R/N/O                           SHARES
-------------------                  -----                        BEING OFFERED
                                                                  -------------

                                     SchA-1

<PAGE>

                                  SCHEDULE 7(B)
                                  -------------

1) J.P. Turner - 235,000 shares of common stock.

2) The Seidler Company - 200,000 shares of common stock.

3) Garrett Vreeland - 10,000 shares of common stock.

                                    Sch7(b)-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]