Document:

EX-4.1 FORM OF REGISTRATION RIGHTS AGREEMENT

 

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made and entered into as of the 17th
day of April 2007, by and among VERSO TECHNOLOGIES, INC., a Minnesota corporation (“PURCHASER”),
and certain of the stockholders and employees of SENTITO NETWORKS, INC., a Delaware corporation
(“TARGET”), and other persons listed on Schedule 1 attached hereto (each such person a
“Seller” and, collectively, the “Sellers”).

     IN CONSIDERATION of the mutual promises and covenants set forth herein, and intending to be
legally bound, the parties hereto hereby agree as follows:

			
	1.	 	RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS

     1.1 Certain Definitions. Except as otherwise stated herein, capitalized terms used
herein without definition shall have the meaning ascribed to such terms in the Agreement and Plan
of Merger dated as of April 4, 2007 to which PURCHASER and certain other persons are parties
relating to the merger of SN Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of PURCHASER, with and into TARGET (the “Merger Agreement”). In addition, the following
terms shall have the meanings set forth below:

          (a) “Additional Registrable Securities” shall mean the shares of PURCHASER Common Stock issued
by PURCHASER to Sellers pursuant to Sections 3.6 and 3.7 of the Merger Agreement, provided that an
Additional Registrable Security ceases to be an Additional Registrable Security when (i) it is sold
pursuant to an effective registration statement filed under the 1933 Act; (ii) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar provisions then in effect);
(iii) it is eligible to be sold or transferred under Rule 144 without holding period or volume
limitations; or (iv) it is sold in a private transaction in which the transferor’s rights under
this Agreement are not assigned.

          (b) “Contingent Share Issue Date” shall mean the date on which PURCHASER issues the shares of
PURCHASER Common Stock to Sellers pursuant to and in accordance with Sections 3.6 and 3.7 of the
Merger Agreement.

          (c) “Holder” shall mean any Seller who holds Registrable Securities and any holder of
Registrable Securities to whom the rights conferred by this Agreement have been transferred in
compliance with Section 1.2 hereof.

          (d) “Initial Registrable Securities” shall mean the shares of PURCHASER Common Stock issued to
the Sellers pursuant to Section 3.1 of the Merger Agreement (or otherwise in connection with the
Merger, including, without limitation, such shares issued pursuant to the agreements referenced in
Sections 10.1(g) and 10.1(h) of the Merger Agreement) and the shares of PURCHASER Common Stock
issuable upon exercise of the Holder Warrants issued to certain Sellers pursuant to Section 3.1 of
the Merger Agreement, provided that an Initial Registrable Security ceases to be an Initial
Registrable Security when (i) it is sold pursuant

 

to an effective registration statement filed under the 1933 Act; (ii) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar provisions then in effect);
(iii) it is eligible to be sold or transferred under Rule 144 without holding period or volume
limitations; or (iv) it is sold in a private transaction in which the transferor’s rights under
this Agreement are not assigned.

          (e) “Other Stockholders” shall mean persons who, by virtue of agreements with PURCHASER
entered into prior to the date hereof and listed on Schedule 2 hereto, are entitled to
include certain securities of PURCHASER described on Schedule 2 hereto (“Other Registrable
Securities”) in registrations filed hereunder.

          (f) “Prior Registration Rights Agreements” shall mean the Registration Rights Agreements
between PURCHASER and the persons signatory thereto dated January 30, 2007, February 2, 2007,
February 5, 2007 and February 9, 2007.

          (g) “Prior Registration Statement” shall mean the registration statement filed by PURCHASER
with the SEC under the 1933 Act pursuant to the Prior Registration Rights Agreements.

          (h) “Registrable Securities” shall mean the Initial Registrable Securities and the Additional
Registrable Securities.

          (i) 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 of
1933, as amended (the “1933 Act”), and applicable rules and regulations thereunder and the
declaration or ordering of the effectiveness of such registration statement.

          (j) “Registration Expenses” shall mean all expenses incurred in effecting any registration
pursuant to this Agreement, including, without limitation, all federal and state registration,
qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for PURCHASER and one counsel selected to represent the Holders, which counsel shall be reasonably
satisfactory to PURCHASER, blue sky fees and expenses, and expenses of any regular or special
audits incident to or required by any such registration, but shall not include (i) Selling
Expenses, (ii) the compensation of regular employees of PURCHASER, which shall be paid in any event
by PURCHASER, and (iii) blue sky fees and expenses incurred in connection with the registration or
qualification of any Registrable Securities in any state, province or other jurisdiction in a
registration pursuant to Section 1.3 hereof only to the extent that PURCHASER shall otherwise be
making no offers or sales in such state, province or other jurisdiction in connection with such
registration.

          (k) “Restricted Securities” shall mean any Registrable Securities required to bear the legend
set forth in Section 1.2(c) hereof.

          (l) “Rule 144” shall mean Rule 144 as promulgated by the SEC under the 1933 Act, as such rule
may be amended from time to time, or any similar successor rule that may
be promulgated by the SEC.

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          (m) “Rule 145” shall mean Rule 145 as promulgated by the SEC under the 1933 Act, as such rule
may be amended from time to time, or any similar successor rule that may be promulgated by the SEC.

          (n) “SEC” shall mean the Securities and Exchange Commission.

          (o) “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities.

     1.2 Restrictions on Transfer.

          (a) Each Holder agrees not to make any disposition of all or any portion of the Registrable
Securities unless and until (i) there is then in effect a registration statement under the 1933 Act
covering such proposed disposition and such disposition is made in accordance with such
registration statement, or (ii) (A) such Holder shall have notified PURCHASER of the proposed
disposition and shall have furnished PURCHASER with a detailed statement of the circumstances
surrounding the proposed disposition and (B) if reasonably requested by PURCHASER, such Holder
shall have furnished PURCHASER with an opinion of counsel, reasonably satisfactory to PURCHASER,
that such disposition will not require registration of such shares under the 1933 Act.

          (b) Notwithstanding the provisions of subparagraphs (i) and (ii) of Section 1.2(a) hereof, no
such registration statement or opinion of counsel shall be necessary for a transfer by a Holder
which is (i) a partnership to its partners in accordance with their partnership interests, (ii) a
limited liability company to its members in accordance with their member interests or (iii) to the
Holder’s family member or a trust for the benefit of an individual Holder or one or more of his
family members, provided that the transferee will be subject to the terms of this Section 1.2 to
the same extent as if it were an original Holder hereunder.

          (c) Each certificate representing Registrable Securities shall (unless otherwise permitted by
the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following (in addition to any legend required under applicable state securities
laws):

THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT OR UNLESS PURCHASER HAS
RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO PURCHASER AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

     (d) PURCHASER shall be obligated to promptly reissue unlegended certificates at the request of
any Holder thereof if the Holder shall have obtained an opinion of counsel (which counsel may be
counsel to PURCHASER) reasonably acceptable to PURCHASER to the effect that the securities proposed
to be disposed of may lawfully be so disposed of in compliance with the 1933 Act without
registration, qualification or legend.

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          (e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the
stop-transfer instructions with respect to such securities shall be removed upon receipt by
PURCHASER of an order of the appropriate blue sky authority authorizing such removal or if the
Holder shall request such removal and shall have obtained and delivered to PURCHASER an opinion of
counsel reasonably acceptable to PURCHASER to the effect that such legend and/or stop-transfer
instructions are no longer required pursuant to applicable state securities laws.

     1.3 Registration.

          (a) Filing of Registration Statement. PURCHASER shall use its reasonable best efforts
to file with the SEC as soon as practicable after the Merger, but in no event later than twenty
(20) business days after the SEC declares the Prior Registration Statement effective, a
registration statement covering the resale of all of the Initial Registrable Securities (including
the Escrow Shares) for an offering to be made on a continuous basis pursuant to Rule 415 as
promulgated by the SEC under the 1933 Act. The registration statement shall be on Form S-3 (except
if PURCHASER is not then eligible to register for resale the Registrable Securities on Form S-3, in
which case such registration shall be on another appropriate form in accordance herewith) and shall
contain substantially the Plan of Distribution attached hereto as Annex A.

          (b)  Right to Piggyback. If at any time after the Contingent Share Issue Date,
PURCHASER shall determine to register any shares of PURCHASER Common Stock for its own account or
for the account of any stockholder of PURCHASER, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule 145 transaction, or a
registration on any registration form that does not permit secondary sales or a registration
statement filed pursuant to the terms of an agreement existing as of the date hereof that does not
permit the inclusion of the Additional Registrable Securities therein, then PURCHASER will:

               (i) promptly give to each Holder written notice thereof, which notice briefly describes the
Holders’ rights under this Section 1.3(b) (including notice deadlines); and

               (ii) use its best efforts to include in such registration (and any related filing or
qualification under applicable blue sky laws), except as set forth in Section 1.3(f) below, and in
any underwriting involved therein, all the Additional Registrable Securities not already covered by
an existing and effective registration and specified in a written request or requests, made by any
Holder and received by PURCHASER within ten (10) days after the written notice from PURCHASER
described in clause (i) above is mailed or delivered by PURCHASER; provided, however, that such
Holders shall have requested for inclusion in such registration at least ten percent (10%) of the
aggregate number of the Additional Registrable Securities which have been issued or transferred to
the Holders prior to the date of such written request and which are not already covered by an
existing and effective registration. Such written request may specify all or a part of a Holder’s
Additional Registrable Securities.

          (c) Effectiveness. PURCHASER shall use its reasonable best efforts to cause the
registration filed pursuant to Section 1.3(a) or Section 1.3(b) hereof to become effective as soon
as practicable following the filing thereof. PURCHASER shall use

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commercially reasonable efforts to maintain the effectiveness of a registration filed pursuant
to Section 1.3 hereof until the earlier of (i) twelve (12) months after the date such registration
is declared effective by the SEC; (ii) the date on which all of the Registrable Securities may be
resold by the Holders without registration and without regard to volume limitations by reason of
Rule 144(k) (or similar provision then in effect); or (iii) the date on which all of Registrable
Securities have been sold pursuant to such registration statement or Rule 144 (or similar provision
then in effect).

          (d) Registration of Other Securities.

               (i) PURCHASER may include any securities of PURCHASER in the registration statement
filed pursuant to Section 1.3(a) of this Agreement, including, without limitation, the
Registrable Securities and the Other Registrable Securities.

               (ii) Without the written consent of the Holders of at least fifty-one (51%) percent of
the Initial Registrable Securities, PURCHASER shall not file any registration statement
other than as required by the Prior Registration Rights Agreements or other than with
respect to the Other Registrable Securities, pursuant to registration rights described on
Schedule 2, prior to the 30th day following the day that PURCHASER files the
registration filed pursuant to Section 1.3(a) hereof, provided that this Section 1.3(d)(ii)
shall not prohibit PURCHASER from filing (A) amendments to registration statements filed
prior to the date of this Agreement or (B) a registration relating solely to employee
benefit plans.

          (e) Covenants. PURCHASER agrees (i) not to delay the filing of the Prior Registration
Statement beyond May 16, 2007 (regardless of whether such delay is permitted pursuant to an
amendment of the Prior Registration Rights Agreements or by consent of the persons signatory to
such agreements); (ii) to use its best efforts to cause the Prior Registration Statement to be
declared effective under the 1933 Act as promptly as possible after the filing thereof; and (iii)
not to amend or waive any provision of the Prior Registration Rights Agreements to modify or
otherwise alter PURCHASER‘s obligation thereunder to use its best efforts to cause the Prior
Registration Statement to be declared effective under the 1933 Act as promptly as possible after
the filing thereof.

          (f) Underwriting. If the registration of which PURCHASER gives notice pursuant to
Section 1.3(b)(i) is for a registered public offering involving an underwriting, PURCHASER shall so
advise the Holders as a part of such written notice. In such event, the right of any Holder to
registration pursuant to Section 1.3(b) hereof shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s Additional Registrable
Securities in the underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with PURCHASER and the other holders of
securities of PURCHASER with registration rights to participate therein distributing their
securities through such underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected by PURCHASER. Notwithstanding any
other provision of Section 1.3(b) hereof, if the representative of the underwriters advises
PURCHASER in writing that marketing factors require a limitation on the number of shares to be
underwritten, then the representative may

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(subject to the limitations set forth below) exclude all Additional Registrable Securities
from, or limit the number of Additional Registrable Securities to be included in, the registration
and underwriting. PURCHASER shall so advise all Holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the registration and
underwriting shall be allocated first to PURCHASER for securities being sold for its own account
and thereafter as set forth in Section 1.10 hereof. If any person does not agree to the terms of
any such underwriting, then such person shall be excluded therefrom by written notice from
PURCHASER or the underwriter. Any Additional Registrable Securities or other securities excluded
or withdrawn from such underwriting shall be withdrawn from such registration. If shares are so
withdrawn from the registration and if the number of shares of Additional Registrable Securities to
be included in such registration was previously reduced as a result of marketing factors, then
PURCHASER shall then offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in an aggregate amount
equal to the number of shares so withdrawn, with such shares to be allocated among the persons
requesting additional inclusion in accordance with Section 1.10 hereof.

     1.4 Expenses of Registration. All Registration Expenses incurred in connection with
any registration, qualification or compliance pursuant to Section 1.3 hereof shall be borne by
PURCHASER. All Selling Expenses relating to securities so registered shall be borne by each Holder
incurring Selling Expenses or, if Selling Expenses are incurred by more than one Holder jointly,
then by the Holders of such securities pro rata on the basis of the number of shares of securities
so registered on their behalf.

     1.5 Registration Procedures. In the case of a registration effected by PURCHASER
pursuant to Section 1.3 hereof, PURCHASER will keep each Holder advised in writing as to the
initiation of such registration and as to the completion thereof. At its expense, PURCHASER will
use its best efforts to:

          (a) 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 1933 Act with respect to the disposition of all
securities covered by such registration statement;

          (b) furnish such number of prospectuses and other documents incident thereto, including any
amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

          (c) notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the 1933 Act of the
happening of any event as a result of which the prospectus included 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 or
incomplete in the light of the circumstances then existing, and at the request of any such Holder,
prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to such Holder of such
Registrable Securities, such prospectus shall not include an

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untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete in the light of
the circumstances then existing; provided, however, PURCHASER shall not be obligated to prepare and
furnish any such prospectus supplements or amendments relating to any material nonpublic
information at any such time as the Board of Directors of PURCHASER has determined in good faith
that, for good business reasons, the disclosure of such material nonpublic information at that time
is contrary to the best interests of PURCHASER and its stockholders in the circumstances and is not
otherwise required under applicable law (including applicable securities laws);

          (d) cause all such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange and/or included in any national quotation system on which similar securities
issued by PURCHASER are then listed or included; and

          (e) provide a transfer agent and registrar for all Registrable Securities registered pursuant
to such registration statement and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration.

     1.6 Indemnification.

          (a) PURCHASER will indemnify each Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder within the meaning of Section 15
of the 1933 Act, with respect to which registration, qualification, or compliance has been effected
pursuant to this Section 1, and each underwriter, if any, and each person who controls within the
meaning of Section 15 of the 1933 Act any underwriter, against all expenses, claims, losses,
damages, and liabilities (or actions, proceedings, or settlements 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, or any violation by PURCHASER
of the 1933 Act or any rule or regulation thereunder applicable to PURCHASER or relating to action
or inaction required of PURCHASER in connection with any such registration, qualification, or
compliance, and will reimburse each such Holder, each of its officers, directors, partners, legal
counsel and accountants and each person controlling such Holder, 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 or settling any such claim, loss, damage, liability,
or action, provided that PURCHASER will not be liable in any such case 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 PURCHASER by such Holder or underwriter and
stated to be specifically for use therein. It is agreed that the indemnity agreement contained in
this Section 1.6(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 PURCHASER (which consent
shall not be unreasonably withheld or delayed).

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          (b) Each Holder, severally and not jointly, will, if Registrable Securities held by such
Holder are included in the securities as to which such registration, qualification, or compliance
is being effected, indemnify PURCHASER, each of its directors, officers, partners, legal counsel,
and accountants and each underwriter, if any, of PURCHASER‘s securities covered by such a
registration statement, each person who controls PURCHASER or such underwriter within the meaning
of Section 15 of the 1933 Act, each other such Holder and Other Stockholder, and each of their
officers, directors, and partners, and each person controlling such Holder or Other Stockholder,
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 statements therein not misleading, and will reimburse PURCHASER and such Holders, Other
Stockholders, directors, officers, partners, legal counsel, and accountants, persons, underwriters,
or control persons for any legal or any other expenses reasonably incurred in connection with
investigating or 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
PURCHASER by such Holder and stated to be specifically for use therein; provided, however, (i) that
the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is
effected without the consent of such Holder (which consent shall not be unreasonably withheld or
delayed) and (ii) that in no event shall any indemnity under this Section 1.6(b) exceed the gross
proceeds from the offering received by such Holder.

          (c) Each party entitled to indemnification under this Section 1.6 (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 such claim or 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 unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party’s 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 1.6, to the extent such failure is not prejudicial. 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 that does
not include as an unconditional term thereof the giving by the claimant or plaintiff of a release
to such Indemnified Party from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such 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 defense of such claim and litigation resulting therefrom.

          (d) If the indemnification provided for in this Section 1.6 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any loss,

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liability, claim, damage, or expense referred to therein, then the Indemnifying Party, in lieu
of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the conduct, statements or
omissions that resulted in such loss, liability, claim, damage, or expense as well as any other
relevant equitable considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information, and opportunity to correct or prevent such
statement or omission.

     1.7 Information by Holder. Each Holder of Registrable Securities shall furnish to
PURCHASER such information regarding such Holder and the distribution proposed by such Holder as
PURCHASER may reasonably request in writing and as shall be reasonably required in connection with
any registration, qualification, or compliance referred to in this Section 1. In addition, each
Holder shall furnish to PURCHASER a completed questionnaire on the form attached to this Agreement
as Annex B not less than ten (10) business days prior the filing of a registration pursuant
to Section 1.3 hereof.

     1.8 Rule 144 Reporting. With a view to making available the benefits of certain rules
and regulations of the SEC that may permit the sale of the Restricted Securities to the public
without registration, PURCHASER agrees to use its best efforts to:

          (a) make and keep adequate public information regarding PURCHASER available as those terms are
understood and defined in Rule 144;

          (b) file with the SEC in a timely manner all reports and other documents required of PURCHASER
under the 1933 Act and the 1934 Act; and

          (c) so long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon
written request a written statement by PURCHASER as to its compliance with the reporting
requirements of Rule 144 and of the 1933 Act and the 1934 Act, a copy of the most recent annual or
quarterly report of PURCHASER, and such other reports and documents so filed as a Holder may
reasonably request in availing itself of any rule or regulation of the SEC allowing a Holder to
sell any such securities without registration.

     1.9 Delay of Registration.

          (a) Notice to Discontinue. Each Holder agrees by acquisition of any Restricted
Securities that, upon receipt of any notice from PURCHASER of any event of the kind described in
Section 1.5(c) hereof, the Holder will discontinue the disposition of Registrable Securities until
the Holder receives copies of the supplemented or amended prospectus contemplated by Section 1.5(c)
hereof. In addition, if PURCHASER requests, the Holder will deliver to PURCHASER (at PURCHASER‘s
expense) all copies, other than permanent file copies then in the Holder’s possession, of the
prospectus covering the Registrable Securities

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current at the time of receipt of such notice. If PURCHASER gives any such notice, the time
period mentioned in Section 1.3(c) hereof shall be extended by the number of days elapsing between
the date of notice and the date that each Holder who has included Registrable Securities in such
registration receives the copies of the supplemented or amended prospectus contemplated in Section
1.6(c) hereof.

          (b) Notice by Holders. The Holders shall notify PURCHASER, at any time when a
prospectus included in a registration statement filed pursuant to the Agreement is required to be
delivered under the 1933 Act, of the happening of any event, which as to any Holder is (i) to its
respective knowledge; (ii) solely within its respective knowledge; and (iii) solely as to matters
concerning that Holder, as a result of which the prospectus included in the registration statement,
then in effect, contains an untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein, in light of the circumstances then existing, not
misleading.

     1.10 Allocation of Registration Opportunities. In any circumstance in which all of
the Additional Registrable Securities and other shares of PURCHASER with registration rights
(“Other Shares”) requested to be included in a registration contemplated by Section 1.3(b) cannot
be so included as a result of limitations of the aggregate number of shares of Additional
Registrable Securities and Other Shares that may be so included (the aggregate number of shares
that may be so included, the “Piggyback Shares”), the number of Piggyback Shares shall first be
allocated, subject to the registration rights applicable to any of the Other Shares that are Other
Registrable Securities which registration rights shall control in event of a conflict with
provisions hereof, among the Holders and the Other Stockholders requesting inclusion of shares pro
rata on the basis of the number of shares of Additional Registrable Securities and Other
Registrable Securities held by such Holders and Other Stockholders; provided,
however, that such allocation shall not operate to reduce the aggregate number of Piggyback
Shares to be included in such registration, if any Holder or Other Stockholder does not request
inclusion of the maximum number of shares of Additional Registrable Securities and Other
Registrable Securities allocated to such Holder or Other Stockholder pursuant to the
above-described procedure, then the remaining portion of such allocation shall be reallocated among
those requesting Holders and Other Stockholders whose allocations did not satisfy their requests
pro rata on the basis of the number of shares of Additional Registrable Securities and Other
Registrable Securities which would be held by such Holders and Other Stockholders, and this
procedure shall be repeated until all of the Piggyback Shares have been so allocated. If any
Piggyback Shares remain unallocated after applying the allocation provisions described in the
foregoing sentence, such unallocated Piggyback Shares shall be allocated among the holders of Other
Shares that are not Other Registrable Securities in the manner determined by PURCHASER and such
holders.

			
	2.	 	REPRESENTATIONS AND WARRANTIES OF PURCHASER AND THE SELLERS

     2.1 Representations and Holder Warranties of PURCHASER. PURCHASER represents and
warrants to the Sellers as follows:

          (a) The execution, delivery and performance of this Agreement by PURCHASER have been duly
authorized by all requisite corporate action and will not violate

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any provision of law, any order of any court or other agency of government, the Articles of
Incorporation or Bylaws of PURCHASER, or any provision of any material indenture, agreement or
other instrument to which it or any of its properties or assets is bound, or conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a default under any such
material indenture, agreement or other instrument, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of
PURCHASER.

          (b) This Agreement has been duly executed and delivered by PURCHASER and constitutes the
legal, valid and binding obligation of PURCHASER, enforceable against PURCHASER in accordance with
its terms, subject to applicable bankruptcy, insolvency and other similar laws affecting the
enforceability of creditors’ rights generally, general equitable principles, the discretion of
courts in granting equitable remedies and public policy considerations.

     2.2 Representations and Holder Warranties of the Sellers. Each Seller (severally and
not jointly) represents and warrants to PURCHASER as follows:

          (a) The execution, delivery and performance of this Agreement by such Seller will not violate
any provision of law, any order of any court or any agency or government, or any provision of any
material indenture or agreement or other instrument to which they or any of their respective
properties or assets is bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such material indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge, or encumbrance of any
nature whatsoever upon any of the properties or assets of the Seller except as would not reasonably
be expected to result in a material adverse effect on such Seller.

          (b) This Agreement has been duly executed and delivered by such Seller and constitutes the
legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance
with its terms, subject to applicable bankruptcy, insolvency and other similar laws affecting the
enforceability of creditors’ rights generally, general equitable principles, the discretion of
courts in granting equitable remedies and public policy considerations.

			
	3.	 	MISCELLANEOUS

     3.1 Delay of Registration. No party hereto shall have any right to take any action to
restrain, enjoin, or otherwise delay any registration as the result of any controversy that might
arise with respect to the interpretation or implementation of Section 1 hereof.

     3.2 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto.

     3.3 Entire Agreement; Amendment; Waiver. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the subject hereof and
thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated, except by a written instrument signed by PURCHASER and the Holders of at least
fifty-one percent (51%) of the Registrable Securities and any such amendment, waiver, discharge

-11-

 

or termination shall be binding on all the Holders, but in no event shall the obligation of
any Holder hereunder be materially increased, except upon the written consent of such Holder;
provided, however, that no consent shall be required to add as a party to this Agreement any Seller
listed on Schedule 1 hereto, and upon the execution of this Agreement by any such Seller,
such Seller shall be deemed to be a party hereto as of the date hereof.

     3.4 Notices. All notices or other communications required or permitted hereunder
shall be in writing and shall be mailed by express, registered or certified mail, postage prepaid,
return receipt requested, sent by telecopy (with confirmation of transmission received and followed
by the posting of a “hard copy” of the notice or communication by first-class U.S. mail), or by
courier service guaranteeing overnight delivery with charges prepaid, or otherwise delivered by
hand or by messenger, and shall be conclusively deemed to have been received by a party hereto and
to be effective on the day on which delivered or telecopied to such party at its address set forth
below (or at such other address as such party shall specify to the other parties hereto in
writing), or, if sent by registered or certified mail, on the third business day after the day on
which mailed, addressed to such party at such address.

     In the case of a Holder, such notices and communications shall be addressed to its address as
shown on the stock records of PURCHASER, unless the Holder shall notify PURCHASER in writing that
notices and communications should be sent to a different address, in which case such notices and
communications shall be sent to the address specified by such Holder. In the case of PURCHASER,
such notices and communications shall be addressed as follows: Attention: Chief Financial
Officer, Verso Technologies, Inc., 400 Galleria Parkway, Suite 200, Atlanta, Georgia 30339.

     3.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any Holder, upon any breach or default of PURCHASER under this Agreement shall impair
any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other
breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Holder of any breach or default under this Agreement or
any waiver on the part of any Holder of any provisions or conditions of this Agreement must be made
in writing and shall be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any Holder, shall be
cumulative and not alternative.

     3.6 Rights; Severability. Unless otherwise expressly provided herein, a Holder’s
rights and obligations hereunder are several rights and obligations, not rights or obligations
jointly held with any of the other Holders. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     3.7 Information Confidential. Each Holder acknowledges that the information received
by them pursuant hereto may be confidential and for its use only, and it will not use such
confidential information in violation of the 1934 Act or reproduce, disclose or disseminate such
information to any other person (other than its employees or agents having a need to know

-12-

 

the contents of such information, and its attorneys), except in connection with the exercise
of rights under this Agreement, unless PURCHASER has made such information available to the public
generally or such Holder is required to disclose such information by a governmental body.

     3.8 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this
Agreement are for convenience of reference only and are not to be considered in construing this
Agreement.

     3.9 Counterparts. This Agreement may be executed and delivered (including by
facsimile transmission) in any number of counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed to be an original,
but all of which together shall constitute one and the same instrument. This Agreement shall be
binding upon each of the signatories hereto as and when executed by them even though this Agreement
may be executed by less than all of the Sellers.

     3.10 Governing Law; Jurisdiction. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Georgia without reference to
Georgia’s choice of law rules and each of the parties hereto hereby consents to personal
jurisdiction in any federal or state court in the State of Georgia.

[Signatures on the following pages.]

-13-

 

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement or have caused this
Agreement to be duly executed on its behalf by an officer or representative thereto duly
authorized, all as of the date first above written.

	 	 	 	 	 
	 	VERSO TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Its:  	 	 
	 

[Signatures continue on the following pages.]

-14-

 

ANNEX A

PLAN OF DISTRIBUTION

     Each selling stockholder (the “Selling Stockholders”) of the PURCHASER Common Stock and
any of their, assignees and successors-in-interest may, from time to time, sell any or all of their
shares of PURCHASER Common Stock on the NASDAQ Capital Market or any other stock exchange, market
or trading facility on which the shares are traded or in private transactions. These sales may be
at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following
methods when selling shares:

	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate the
transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable
exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;
	 
	 	•	 	through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
	 
	 	•	 	a combination of any such methods of sale; or
	 
	 	•	 	any other method permitted pursuant to applicable law.

     The Selling Stockholders may also sell shares under Rule 144, if available, rather than under
this prospectus.

     Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this
prospectus, in the case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440.

A-1

 

     The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the 1933 Act in connection with
such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the 1933 Act. Each Selling Stockholder has informed PURCHASER that it does not
have any written or oral agreement or understanding, directly or indirectly, with any person to
distribute the PURCHASER Common Stock.

     PURCHASER is required to pay certain fees and expenses incurred by PURCHASER incident to the
registration of the shares. PURCHASER has agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including liabilities under the 1933 Act.

     Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the 1933
Act, they will be subject to the prospectus delivery requirements of the 1933 Act, including Rule
172 thereunder. In addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than under this prospectus. There is no
underwriter or coordinating broker acting in connection with the proposed sale of the resale shares
by the Selling Stockholders.

     PURCHASER has agreed to use commercially reasonable efforts to keep this prospectus effective
until the earlier (i) twelve (12) months after the date on which the registration statement of
which this prospectus is a part is declared effective by the SEC; (ii) the date on which the shares
may be resold by the Selling Stockholders without registration and without regard to any volume
limitations by reason of Rule 144(k) (or similar provision then in effect) or (iii) all of the
shares have been sold pursuant to this prospectus or Rule 144. The resale shares will be sold only
through registered or licensed brokers or dealers if required under applicable state securities
laws. In addition, in certain states, the resale shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.

     Under applicable rules and regulations under the 1933 Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to the PURCHASER Common Stock for the applicable restricted period, as defined in
Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders
will be subject to applicable provisions of the 1934 Act and the rules and regulations thereunder,
including Regulation M, which may limit the timing of purchases and sales of shares of the
PURCHASER Common Stock by the Selling Stockholders or any other person. PURCHASER will make copies
of this prospectus available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the 1933 Act).

A-2

 

ANNEX B

VERSO TECHNOLOGIES, INC.

Selling Securityholder Notice and Questionnaire

     The undersigned beneficial owner of common stock (the “Registrable Securities”) of Verso
Technologies, Inc., a Minnesota corporation (the “PURCHASER”), understands that PURCHASER has filed
or intends to file with the Securities and Exchange Commission (the “SEC”) a registration statement
(the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the “1933 Act”), of the Registrable Securities, in accordance with the terms
of the Registration Rights Agreement (the “Registration Rights
Agreement”) dated as of April 17,
2007, executed pursuant to that certain Agreement and Plan of Merger dated as of April 4, 2007,
among PURCHASER, SN Acquisition Corporation, Sentito Networks, Inc. and the Stockholders’ Agent (as
defined therein) (the “Merger Agreement”). A copy of the Registration Rights Agreement is
available from PURCHASER upon request at the address following address: Verso Technologies Inc.,
400 Galleria Parkway, Suite 200, Atlanta, GA 30339-3182, Attn: Chief Financial Officer. All
capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the
Registration Rights Agreement.

     Certain legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.

NOTICE

     The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities
hereby elects to include the Registrable Securities owned by it in the Registration Statement.

B-1

 

The undersigned hereby provides the following information to PURCHASER and represents and warrants
that such information is accurate:

QUESTIONNAIRE

	1.	 	Name.

	 	(a)	 	Full legal name of selling securityholder:
	 
	 	 	 	 
 

	 
	 	(b)	 	Full legal name of registered holder (if not the same as (a) above) through
which Registrable Securities are held:
	 
	 	 	 	 
 

	 
	 	(c)	 	Full legal name of natural control person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
	 
	 	 	 	 
 

	2.	 	Address for Notices to Selling Securityholder.

 
 

 
 

 
 

	 	 	 
	Telephone:
	 
	 

	 

	Fax: 
	 	 
	 

	 
	Contact Person:
	 
	 

	 	 

	3.	 	Broker-Dealer Status.

	 	(a)	 	Are you a broker-dealer?

Yes o
                    No o

	 	(b)	 	If “yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the PURCHASER?

Yes o                     No o

B-2

 

          Note: If no, the SEC’s staff has indicated that you should be identified
as an underwriter in the Registration Statement.

	 	(c)	 	Are you an affiliate of a broker-dealer?

Yes  o                    No o

	 	(d)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?

Yes  o                     No o

          Note: If no, the SEC’s staff has indicated that you should be identified
as an underwriter in the Registration Statement.

	4.	 	Beneficial ownership of other securities of PURCHASER owned by the Selling Securityholder.

Except as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of PURCHASER other than the securities issued or issuable
pursuant to the Merger Agreement.

	 	(a)	 	Type and amount of other securities beneficially owned by the Selling
Securityholder:
	 	 	 	 
	 
	 	 	 	 

	5.	 	Relationships with PURCHASER.

Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
PURCHASER (or its predecessors or affiliates) during the past three years.

	 	 	 	State any exceptions here:
	 
	 	 	 	 
 

	 
	 	 	 	 

B-3

 

     The undersigned agrees to promptly notify PURCHASER of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the
Registration Statement remains effective.

     By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 5 and the inclusion of such information in the
Registration Statement and the related prospectus and any amendments or supplements thereto. The
undersigned understands that such information will be relied upon by PURCHASER in connection with
the preparation or amendment of the Registration Statement and the related prospectus.

     IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 
	Dated:                                          	Beneficial Owner:                                                             

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

     PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

B-4EX-4.2 FORM OF WARRANT

 

Exhibit 4.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE 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 OR SOLD 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

WARRANT

VERSO TECHNOLOGIES, INC.

	 	 	 	 	 
	Warrant Number: [            ]
	 	 	 	 
	Warrant Shares:   [            ]

	 	 	 	Initial Exercise Date: [                 ], 2007

     THIS
WARRANT (the “Warrant”) certifies that, for value received, ___ (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on
or prior to the close of business on the five (5) year anniversary of the Initial Exercise Date
(the “Termination Date”) but not thereafter, to subscribe for and purchase from Verso Technologies,
Inc., a Minnesota corporation (“PURCHASER”), up to
___ shares (the “Warrant Shares”) of common
stock, par value $.01 per share, of PURCHASER (the “PURCHASER Common Stock”). The purchase price
of one share of PURCHASER Common Stock under this Warrant shall be equal to the Exercise Price, as
defined in Section 2(b).

     Section 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Agreement and Plan of Merger dated as of
April 4, 2007, by and among PURCHASER, SN Acquisition Corporation, Sentito Networks, Inc. and the
Stockholders’ Agent (the “Merger Agreement”). In addition, the following terms shall have the
meanings set forth below:

          “Trading Day” means a day on which the PURCHASER Common Stock is traded on a Trading Market.

 

 

          “Trading Market” means the following markets or exchanges on which the PURCHASER Common Stock
is listed or quoted for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board.

          “VWAP” means, for any date, the price determined by the first of the following clauses that
applies: (a) if the PURCHASER Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the PURCHASER Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the PURCHASER Common Stock is then listed or quoted for
trading as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time)
to 4:02 p.m. (New York City time); (b) if the OTC Bulletin Board is not a Trading Market, the
volume weighted average price of the PURCHASER Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board; (c) if the PURCHASER Common Stock is not then quoted for trading
on the OTC Bulletin Board and if prices for the PURCHASER Common Stock are then reported in the
“Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the PURCHASER Common Stock
so reported; or (d) in all other cases, the fair market value of a share of PURCHASER Common Stock
as determined by an independent appraiser selected in good faith by the PURCHASER and reasonably
acceptable to the PURCHASER, the fees and expenses of which shall be paid by the PURCHASER.

     Section 2. Exercise.

          (a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on
or before the Termination Date by delivery to PURCHASER of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (or such other office or agency of PURCHASER as it may
designate by notice in writing to the registered Holder at the address of such Holder appearing on
the books of PURCHASER); and, within three (3) Trading Days of the date said Notice of Exercise is
delivered to PURCHASER, PURCHASER shall have received payment of the aggregate Exercise Price of
the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to PURCHASER until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to PURCHASER for cancellation within three (3) Trading Days of the date the
final Notice of Exercise is delivered to PURCHASER. Partial exercises of this Warrant resulting in
purchases of a portion of the total number of Warrant Shares available hereunder shall have the
effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased. The Holder and PURCHASER shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases.
PURCHASER shall deliver any objection to any Notice of Exercise Form within two (2) business days
of receipt of such notice. In the event of any dispute or discrepancy, the records of PURCHASER
shall be controlling and determinative in the absence of manifest error. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree that,

-2-

 

by reason of the provisions of this paragraph, following the purchase of a portion of the
Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any
given time may be less than the amount stated on the face hereof.

          (b) Exercise Price. The exercise price per share of the PURCHASER Common Stock under
this Warrant shall be $1.25, subject to adjustment hereunder (the “Exercise Price”).

          (c) Cashless Exercise. If at any time after one year from the date of issuance of
this Warrant there is no effective registration statement registering, or no current prospectus
available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be
exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to
receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:

          (A) = the VWAP on the Trading Day immediately preceding the date of
such election;

          (B) = the Exercise Price of this Warrant, as adjusted; and

          (X) = the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means of a cash
exercise rather than a cashless exercise.

          (d) Exercise Limitations. PURCHASER shall not effect any exercise of this Warrant,
and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that
after giving effect to such issuance after exercise as set forth on the applicable Notice of
Exercise, such Holder (together with such Holder’s Affiliates, and any other person or entity
acting as a group together with such Holder or any of such Holder’s Affiliates) would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of shares of PURCHASER Common Stock beneficially owned by such
Holder and its Affiliates shall include the number of shares of PURCHASER Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall
exclude the number of shares of PURCHASER Common Stock which would be issuable upon (i) exercise
of the remaining, nonexercised portion of this Warrant beneficially owned by such Holder or any of
its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any
other securities of PURCHASER subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by such Holder or any of its affiliates. Except as
set forth in the preceding sentence, for purposes of this Section 2(d), beneficial ownership shall
be calculated in accordance with Section 13(d) of the 1934 Act and the rules and regulations
promulgated thereunder, it being acknowledged by the Holder that PURCHASER is not representing to
such Holder that such calculation is in compliance with Section 13(d) of the 1934 Act and such
Holder is solely responsible for any schedules required to be filed in accordance therewith. To
the extent that the limitation contained in this Section 2(d) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by such Holder together with any
Affiliates) and of which a portion of this Warrant is exercisable

-3-

 

shall be in the sole discretion of a Holder, and the submission of a Notice of Exercise shall
be deemed to be each Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by such Holder together with any Affiliates) and of which portion of this
Warrant is exercisable, in each case subject to such aggregate percentage limitation, and PURCHASER
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined in accordance with
Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2(d), in determining the number of outstanding shares of PURCHASER Common Stock, a
Holder may rely on the number of outstanding shares of PURCHASER Common Stock as reflected in (A)
PURCHASER’s most recent Form 10-Q or Form 10-K, as the case may be, (B) a more recent public
announcement by PURCHASER or (z) any other notice by PURCHASER or PURCHASER’s transfer agent
setting forth the number of shares of PURCHASER Common Stock outstanding. Upon the written or oral
request of a Holder, PURCHASER shall within two (2) business days confirm orally and in writing to
such Holder the number of shares of PURCHASER Common Stock then outstanding. In any case, the
number of outstanding shares of PURCHASER Common Stock shall be determined after giving effect to
the conversion or exercise of securities of PURCHASER, including this Warrant, by such Holder or
its Affiliates since the date as of which such number of outstanding shares of PURCHASER Common
Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares
of PURCHASER Common Stock outstanding immediately after giving effect to the issuance of shares of
PURCHASER Common Stock issuable upon exercise of this Warrant. The Beneficial Ownership Limitation
provisions of this Section 2(d) may be waived (the “Initial Waiver”) by such Holder, at the
election of such Holder, upon not less than 61 days’ prior notice to PURCHASER to change the
Beneficial Ownership Limitation to 9.99% of the number of shares of PURCHASER Common Stock
outstanding immediately after giving effect to the issuance of shares of PURCHASER Common Stock
upon exercise of this Warrant, and the provisions of this Section 2(d) shall continue to apply.
Furthermore, after the Initial Waiver, the Beneficial Ownership Limitation of this Section 2(d) may
be further waived by such Holder, at the election of such Holder, upon not less than 61 days’ prior
notice to PURCHASER of such subsequent waiver, and the provisions of this Section 2(d) shall cease
to apply. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(d) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial
Ownership Limitation or waiver thereof contained herein or to make changes or supplements necessary
or desirable to properly give effect to such limitation or waiver. The limitations contained in
this paragraph shall apply to a successor holder of this Warrant.

-4-

 

          (e) Mechanics of Exercise.

               (i) Authorization of Warrant Shares. PURCHASER covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges created by PURCHASER in
respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

               (ii) Delivery of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of PURCHASER to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust Company through its
Deposit Withdrawal Agent Commission system if PURCHASER is a participant in such system, and
otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise
within three (3) Trading Days from the delivery to PURCHASER of the Notice of Exercise Form,
surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth
above the (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by PURCHASER. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to PURCHASER of the Exercise Price (or by cashless exercise, if permitted) and
all taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vi) prior to the
issuance of such shares, have been paid.

               (iii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, PURCHASER shall, at the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

               (iv) Rescission Rights. If PURCHASER fails to cause its transfer agent to transmit to
the Holder a certificate or certificates representing the Warrant Shares pursuant to Section
2(e)(ii) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such
exercise.

               (v) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share
which Holder would otherwise be entitled to purchase upon such exercise, PURCHASER shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price or round up to the next whole share.

               (vi) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall
be made without charge to the Holder 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
PURCHASER, and such certificates shall be issued in the name of the Holder or in such

-5-

 

name or names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder; and PURCHASER may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.

               (vii) Closing of Books. PURCHASER will not close its stockholder books or records in
any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

     Section 3. Certain Adjustments.

          (a) Stock Dividends and Splits. If PURCHASER, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise make a distribution or distributions on shares
of PURCHASER Common Stock or any other equity or equity equivalent securities payable in shares of
PURCHASER Common Stock (which, for avoidance of doubt, shall not include any shares of PURCHASER
Common Stock issued by PURCHASER upon exercise of this Warrant), (ii) subdivides outstanding shares
of PURCHASER Common Stock into a larger number of shares, (iii) combines (including by way of
reverse stock split) outstanding shares of PURCHASER Common Stock into a smaller number of shares,
or (iv) issues by reclassification of shares of PURCHASER Common Stock any shares of capital stock
of PURCHASER, then in each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of PURCHASER Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the denominator shall be the number of
shares of PURCHASER Common Stock outstanding immediately after such event and the number of shares
issuable upon exercise of this Warrant shall be proportionately adjusted. Any adjustment made
pursuant to this Section 3(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, combination or
reclassification.

          (b) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i)
PURCHASER effects any merger or consolidation of PURCHASER with or into another Person, (ii)
PURCHASER effects any sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by PURCHASER or another Person) is
completed pursuant to which holders of PURCHASER Common Stock are permitted to tender or exchange
their shares for other securities, cash or property, or (iv) PURCHASER effects any reclassification
of PURCHASER Common Stock or any compulsory share exchange pursuant to which PURCHASER Common Stock
is effectively converted into or exchanged for other securities, cash or property (each
“Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, the number of shares of
PURCHASER capital stock of the successor or acquiring corporation or of PURCHASER, if it is the
surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable
as a result of such merger, consolidation or disposition of assets by a Holder of the

-6-

 

number of shares of PURCHASER Common Stock for which this Warrant is exercisable immediately
prior to such event. For purposes of any such exercise, the determination of the Exercise Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of PURCHASER Common Stock in such
Fundamental Transaction, and PURCHASER shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of PURCHASER Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction. To the extent necessary to effectuate the
foregoing provisions, any successor to PURCHASER or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and
evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of
any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring
any such successor or surviving entity to comply with the provisions of this Section 3(b) and
insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.

          (c) Calculations. All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the
number of shares of PURCHASER Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of PURCHASER Common Stock (excluding treasury shares, if
any) issued and outstanding.

          (d) Voluntary Adjustment By PURCHASER. PURCHASER may at any time during the term of
this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of PURCHASER.

          (e) Notice to Holder.

               (i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to
any provision of this Section 3, PURCHASER shall promptly mail to the Holder a notice setting forth
the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

               (ii) Notice to Allow Exercise by Holder. If (A) PURCHASER shall declare a dividend (or
any other distribution in whatever form) on the PURCHASER Common Stock; (B) PURCHASER shall declare
a special nonrecurring cash dividend on or a redemption of the PURCHASER Common Stock; (C)
PURCHASER shall authorize the granting to all holders of PURCHASER Common Stock rights or warrants
to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of PURCHASER shall be required in connection with any reclassification
of PURCHASER Common Stock, any consolidation or merger to which PURCHASER is a party, any sale or
transfer of all or substantially all of the assets of PURCHASER, of any compulsory share exchange
whereby PURCHASER Common Stock is converted into other securities, cash or property; (E) PURCHASER
shall authorize the voluntary or involuntary dissolution, liquidation

-7-

 

or winding up of the affairs of PURCHASER; then, in each case, PURCHASER shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant Register (as
hereinafter defined) of PURCHASER, at least ten (10) 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 PURCHASER 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 PURCHASER Common Stock of record shall be entitled to exchange their shares of PURCHASER
Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such
notice or any defect therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice. The Holder is entitled to exercise this
Warrant during the ten (10)-day period commencing on the date of such notice to the effective date
of the event triggering such notice.

     Section 4. Transfer of Warrant.

          (a) Transferability. Subject to compliance with any applicable securities laws and
the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of PURCHASER or its designated agent, together with a
written assignment of this Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the
making of such transfer. Upon such surrender and, if required, such payment, PURCHASER shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.

          (b) New Warrants. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of PURCHASER, together with a written notice specifying
the names and denominations in which new Warrants are to be issued, signed by the Holder or its
agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, PURCHASER shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such
notice.

          (c) Warrant Register. PURCHASER shall register this Warrant, upon records to be
maintained by PURCHASER for that purpose (the “Warrant Register”), in the name of the record Holder
hereof from time to time. PURCHASER may deem and treat the registered Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

-8-

 

          (d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the 1933 Act and under applicable state
securities or blue sky laws, PURCHASER may require, as a condition of allowing such transfer, that
(i) the Holder or transferee of this Warrant, as the case may be, furnish to PURCHASER a written
opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made without
registration under the 1933 Act and under applicable state securities or blue sky laws, and (ii)
the Holder or transferee execute and deliver to PURCHASER an investment representation letter in
form and substance acceptable to PURCHASER, and (iii) the transferee be an “accredited investor” as
defined in Rule 501(a) promulgated under the 1933 Act.

     Section 5. Call Option.

          (a) PURCHASER Right to Purchase. The Holder hereby grants to PURCHASER the right to
purchase this Warrant (in whole only and not in part) for cash (the “Call Option”) at a purchase
price equal to $0.001 per Warrant Share for which this Warrant is then exercisable (the “Call
Price”) on a date specified by PURCHASER in accordance with Section 5(b) (the “Call Date”);
provided, however, that the Call Option shall only be exercisable (i) if, at any time after the
Initial Exercise Date, the closing price of the PURCHASER Common Stock for ten (10) consecutive
trading days equals or exceeds 200% of the Exercise Price per share and (ii) if a registration
statement under the 1933 Act is effective on the Call Date that registers all the Warrant Shares
issuable upon the exercise of this Warrant (the “Registrable Stock”). PURCHASER agrees (i) to
prepare and file with the SEC such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such registration statement
effective for a period of not less than one hundred twenty (120) days from the Call Date (or such
lesser time as necessary to permit each seller of Registrable Stock to complete the distribution
described in such registration statement); and (ii) to comply with the provisions of the 1933 Act
with respect to the disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of distribution by the sellers thereof set
Forth in such registration statement.

          (b) Notice to Holder. If PURCHASER elects to exercise its Call Option pursuant to
this Section 5, then at least twenty (20) Trading Days but not more than sixty (60) business days
before the Call Date, PURCHASER shall mail or cause to be mailed a redemption notice (the “Notice”)
by first-class mail to the Holder at the Holder’s address as it appears on the Warrant Register.
The Notice shall state: (i) the Call Date; (ii) the Call Price; (iii) the Exercise Price; (iv) that
this Warrant must be presented and surrendered to PURCHASER to collect the Call Price; (v) that
this Warrant may be exercised at any time before the close of business on the fifth
(5th) business day immediately preceding the Call Date (the “Exercise Termination
Date”); (vi) that, if the Holder wishes to exercise this Warrant, the Holder must satisfy the
requirements of Section 2 prior to the Exercise Termination Date; and (vii) that, unless PURCHASER
defaults in making the payment of the Call Price, the only remaining right of Holder after the
Exercise Termination Date shall be to receive payment of the Call Price upon presentation and
surrender of this Warrant to PURCHASER.

-9-

 

          (c) 4.3 Payment upon Surrender of Warrant. If PURCHASER elects to exercise its Call
Option pursuant to this Section 5, and the Holder does not exercise this Warrant prior to the
Exercise Termination Date, then PURCHASER shall pay the Call Price to the Holder in accordance with
the Notice upon presentation and surrender by the Holder of this Warrant to PURCHASER.

     Section 6. Miscellaneous.

     (a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of PURCHASER prior to the exercise hereof as
set forth in Section 2.

          (b) Loss, Theft, Destruction or Mutilation of Warrant. PURCHASER covenants that upon
receipt by PURCHASER of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the
case of the Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, PURCHASER will make and deliver a
new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.

          (c) 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 not be a business day,
then such action may be taken or such right may be exercised on the next succeeding business day.

          (d) Authorized Shares.

     PURCHASER covenants that during the period the Warrant is outstanding, it will reserve from
its authorized and unissued PURCHASER Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
PURCHASER 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. PURCHASER 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 or
regulation, or of any requirements of any Trading Market upon which the PURCHASER Common Stock may
be listed or quoted for trading.

     Except and to the extent as waived or consented to by the Holder, PURCHASER shall not by any
action, including, without limitation, amending its articles 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 actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, PURCHASER will (i) not increase the par value of any Warrant Shares above

-10-

 

the amount payable therefor upon such exercise immediately prior to such increase in par
value, (ii) take all such action as may be necessary or appropriate in order that PURCHASER may
validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this
Warrant, and (iii) use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable PURCHASER to perform its obligations under this Warrant.

     Before taking any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, PURCHASER shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

          (e) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

          (f) Nonwaiver. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate
on the Termination Date.

          (g) Notices. All notices or other communications required or permitted hereunder
shall be in writing and shall be mailed by express, registered or certified mail, postage prepaid,
return receipt requested, sent by telecopy (with confirmation of transmission received and followed
by the posting of a “hard copy” of the notice or communication by first-class U.S. mail), or by
courier service guaranteeing overnight delivery with charges prepaid, or otherwise delivered by
hand or by messenger, and shall be conclusively deemed to have been received by a party hereto and
to be effective on the day on which delivered or telecopied to such party at its address set forth
below (or at such other address as such party shall specify to the other parties hereto in
writing), or, if sent by registered or certified mail, on the third business day after the day on
which mailed, addressed to such party at such address.

     In the case of the Holder, such notices and communications shall be addressed to its address
as shown on the Warrant Register, unless the Holder shall notify PURCHASER in writing that notices
and communications should be sent to a different address, in which case such notices and
communications shall be sent to the address specified by the Holder. In the case of PURCHASER,
such notices and communications shall be addressed as follows: Attention: Chief Financial
Officer, Verso Technologies, Inc., 400 Galleria Parkway, Suite 200, Atlanta, Georgia 30339.

          (h) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any PURCHASER Common Stock or as a stockholder of PURCHASER, whether such liability is
asserted by PURCHASER or by creditors of PURCHASER.

-11-

 

          (i) Remedies. Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of its rights under
this Warrant. PURCHASER agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific performance that a remedy at law
would be adequate.

          (j) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the
successors of PURCHASER and the successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and
shall be enforceable by any such Holder or holder of Warrant Shares.

          (k) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of PURCHASER and the Holder.

          (l) Severability. Wherever 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 shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.

          (m) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.

     IN WITNESS WHEREOF, PURCHASER has caused this Warrant to be executed by its officer thereunto
duly authorized as of the date first above indicated.

	 	 	 	 	 	 	 
	 	 	VERSO TECHNOLOGIES, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

-12-

 

NOTICE OF EXERCISE

			
	TO:	 	VERSO TECHNOLOGIES, INC. (“PURCHASER”)

     (1) The undersigned hereby elects to purchase ___Warrant Shares of PURCHASER pursuant to
the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any.

	 	(2)	 	Payment shall take the form of (check applicable box):
	 
	 	 	 	o in lawful money of the United States; or
	 
	 	 	 	o if permitted, the cancellation of such number of Warrant Shares
as is necessary, in accordance with the formula set forth in Section 2(c), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in subsection
2(c).

     (3) Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:

                                                            

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery
of a certificate to:

                                                            

                                                            

                                                            

     (4) Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

	 	 	 
	Name of Entity:
	 	 
	 

	 	 
	Signature of Authorized Signatory of Entity:
	 	 
	 

	 	 
	Name of Authorized Signatory:
	 	 
	 

	 	 
	Title of Authorized Signatory:
	 	 
	 

	 	 
	Date:
	 	 
	 

	 	 

 

 

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, [       ] all of or [            ] shares of 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 a fiduciary or
other representative capacity should file proper evidence of authority to assign the foregoing
Warrant.

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