EXHIBIT 10.5
STAND STILL AGREEMENT
This AGREEMENT is entered into on this 19th day of August, 2005 by and
between netGuru, Inc. (the "Company") and LAURUS MASTER FUND LTD. ("LMF").
WHEREAS, on or about the date hereof, the Company entered into that
certain Asset Purchase Agreement (the "Purchase Agreement") by and between
Bentley Systems, Incorporated ("BSI") and the Company whereby the Company has
agreed, subject to the satisfaction of certain conditions, to sell certain of
its assets relating to the REI business (the "Purchased Assets") to BSI in
exchange for cash consideration (the "Asset Sale");
WHEREAS, LMF is the holder of (i) certain promissory notes convertible
into common stock of the Company (the "Notes") secured by a general security
interest in the Company's assets and the assets of the Company's subsidiaries
(the "Security Interest") and (ii) warrants to purchase shares of common stock
of the Company (the "Warrants");
WHEREAS, the completion of the Asset Sale is in the interests of LMF so
as to maximize the value of the Company and provide liquidity to enable the
Company to pay all of its its outstanding obligations to LMF; and
WHEREAS, the Company and LMF desire to enter into this Agreement to (i)
obtain LMF's consent to the transactions contemplated by the Purchase Agreement,
(ii) obtain LMF's agreement from and after the date hereof to refrain from
exercising the Warrants until the earlier to occur of such time as the Asset
Sale is completed (the "Closing"), the Purchase Agreement is terminated by its
terms and February 15, 2006, (iii) to provide a mechanism for the release of the
Purchased Assets from the Security Interest such as to allow for the completion
of the Asset Sale upon completion and payment in full to LMF of all of the
Company's obligations under the Notes.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
1. NON-INTERFERENCE. LMF shall not directly or indirectly, encourage, solicit,
or initiate discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than the
Company) concerning any merger, sale of assets, sale of any equity interest in
the Company or similar transaction involving the Company, or division of the
Company or any other transaction that would involve the transfer or potential
transfer of control of the Company (it being understood that this Agreement
shall not limit LMF's ability to transfer or vote shares of stock in the
Company).
2. LMF STAND STILL. From the date of this Agreement until the earlier to occur
of the completion of the Closing, the termination of the Purchase Agreement
pursuant to its terms or February 15, 2006, LMF shall not take any action that
results in the exercise of any of the Warrants into voting securities issued by
the Company.
3. LMF CONSENT. Subject to LMF being irrevocably paid in full of all of the
Company's obligations under the Notes, LMF hereby consents to and approves of
the Asset Sale and the transactions contemplated by the Purchase Agreement to
the extent that LMF's consent is or may be required pursuant to that certain
Security Agreement dated as of December 23, 2004 between LMF and the Company and
each of the documents relating thereto, to include, without limitation, the
Securities Purchase Agreement and the Common Stock Purchase Warrant each as of
the same date and between the same parties.
4. RELEASE OF LIENS. Prior to the Closing, LMF shall prepare and execute all
documents necessary to release all Assets from the Security Interests and
effective immediately upon the Closing of the transactions contemplated by the
Purchase Agreement and payment in full of all of the Company's obligations to
LMF under the Notes.
5. MISCELLANEOUS.
(a) BSI is an intended third party beneficiary of this
Agreement with the right of direct enforcement.
(b) ENTIRE AGREEMENT. This Agreement and the documents,
instruments and other agreements among the parties hereto as contemplated by or
referred to herein constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(c) CERTAIN EVENTS. This Agreement and the obligations
hereunder shall attach to all of the convertible securities held by LMF and
shall be binding upon any person to whom legal or beneficial ownership of any of
such convertible securities, whether by operation of law or otherwise.
(d) ASSIGNMENT. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other parties and BSI. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Any purported
assignment in violation of this Section shall be void.
(e) AMENDMENTS, WAIVERS, ETC. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by each
of the parties hereto and BSI.
(f) SEVERABILITY. In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other Persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the greatest extent possible,
the economic, business and other purposes of such void or unenforceable
provision.
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(g) NO WAIVER. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(h) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
(i) OTHER REMEDIES; SPECIFIC PERFORMANCE.
(i) OTHER REMEDIES. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
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.
(ii) SPECIFIC PERFORMANCE. It is accordingly agreed
that the parties and BSI shall be entitled to seek an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
(j) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
(k) FURTHER ASSURANCES. At the request of any party or BSI to
another party or parties to this Agreement, such other party or parties shall
execute and deliver such instruments or documents to evidence or further
effectuate (but not to enlarge) the respective rights and obligations of the
parties and to evidence and effectuate any termination of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed, or caused
this Agreement to be executed by a duly authorized officer, as of the date first
written above.
LAURUS MASTER FUND LTD
By: /S/ XXXXXX GRIN
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Name: Xxxxxx Grin
Title: DIRECTOR
NETGURU, INC.
By: /S/ XXXXX X. XXX
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Name: Xxxxx X. Xxx
Title: C.E.O.
Acknowledged as a beneficiary of this Agreement:
BENTLEY SYSTEMS, INCORPORATED
By: /S/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: SVP
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