Document:

Stock Option Agreement Amendment

 

EXHIBIT 10.17.1

Ladenburg Thalmann Financial Services Inc.

153 East 53rd Street, 49th Floor

New York, New York 10022

March 20, 2006

Mr. Mark D. Klein

3 Olmstead Road

Scarsdale, New York 10583

     Re:     Stock Option Agreement

Gentlemen:

     Reference is made to that certain Stock Option Agreement (the “Agreement”), dated as of March
4, 2005, between Mark D. Klein and Ladenburg Thalmann Financial Services Inc. Section 1 is hereby
deleted in its entirety and replaced with the following:

          “1. Subject to the terms hereof, the Option may be exercised on or prior to March 4, 2015
(after which date the Option will, to the extent not previously exercised, expire). The Option
shall vest and become exercisable as to 500,000 of the Shares on and after the date hereof and as
to 1,125,000 of the Shares on and after each of March 4, 2006, 2007, 2008 and 2009, provided you
are then employed by the Company and/or one of its present or future subsidiaries or affiliates
(for purposes of this Agreement, any other entity controlling, controlled by, or under common
control with, the Company); provided, however, that in the event that your employment is terminated
by reason of your death or Disability, by the Company without Cause or by you for Good Reason
(collectively, “Vesting Events”), all unvested Options that would have vested had you remained
employed for the remainder of the then current Employment Period shall vest earlier and become
immediately exercisable.”

Except as indicated above, the Agreement shall remain in full force and effect.

	 	 	 	 	 
	 	LADENBURG THALMANN FINANCIAL

SERVICES INC.

 	 
	 	By:  	/s/ Salvatore Giardina
 	 
	 	 	 	 
	 	 	 	 
	 

Acknowledged and agreed this

20th day of March, 2006

/s/ Mark D. Klein          

Mark D. Klein<PAGE>

                                                                    Exhibit 4.53

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

                                     WARRANT

                TO PURCHASE [_________] SHARES OF COMMON STOCK OF

                            VERSO TECHNOLOGIES, INC.

No. [___________]                                              February 17, 2006

      THIS CERTIFIES THAT, for value received, [_________] or (subject to the
restrictions on transfer contained herein and the provisions of the Registration
Rights Agreement (as hereinafter defined)) [____________]'s registered assigns
(the "Holder") is entitled to purchase from Verso Technologies, Inc., a
Minnesota corporation (the "Company"), at any time or from time to time after
9:00 a.m., Atlanta, Georgia time, on August 18, 2006 (the "Exercise Date") and
prior to 5:00 p.m., Atlanta, Georgia time, on the date which is five (5) years
from the Exercise Date (the "Expiration Date"), at the place where the Warrant
Agency (as hereinafter defined) is located, at the Exercise Price (as
hereinafter defined), the number of shares of common stock, $.01 par value (the
"Common Stock"), of the Company specified above, subject to the terms and
conditions as hereinafter provided.

      Capitalized terms used and not otherwise defined in this Warrant shall
have the meanings set forth in Article V hereof.

                                    ARTICLE I

                              EXERCISE OF WARRANTS

      1.1. Method of Exercise. To exercise this Warrant in whole or in part, the
Holder shall deliver to the Company at the Warrant Agency: (a) this Warrant; (b)
a written notice, substantially in the form of the subscription notice attached
hereto as Annex 1, of such Holder's election to exercise this Warrant, which
notice shall specify the number of whole shares of Common Stock to be purchased,
the denominations of the share certificate or certificates desired and the name
or names of the Eligible Holder(s) in which such

<PAGE>

certificates are to be registered; and (c) payment of the Exercise Price with
respect to such shares of Common Stock. Such payment may be made, at the option
of the Holder, by cash, money order, certified or bank cashier's check or wire
transfer.

      The Company shall, as promptly as practicable and in any event within five
(5) Business Days thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such subscription notice, a certificate or
certificates representing the aggregate number of shares of Common Stock
specified in said notice. The share certificate or certificates so delivered
shall be in such denominations as may be specified in such notice (or, if such
notice shall not specify denominations, one certificate shall be issued) and
shall be issued in the name of the Holder or such other name or names of
Eligible Holder(s) as shall be designated in such notice. Such certificate or
certificates shall be deemed to have been issued, and such Holder or any other
person so designated to be named therein shall be deemed for all purposes to
have become holders of record of such shares, as of the date the aforementioned
notice is received by the Company. If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of the certificate or
certificates, deliver to the Holder a new Warrant evidencing the right to
purchase the remaining shares of Common Stock called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant. The
Company shall pay all expenses payable in connection with the preparation,
issuance and delivery of share certificates and new Warrants as contemplated by
Section 2.6 below (other than transfer or similar taxes in connection with the
transfer of securities), except that, if share certificates or new Warrants
shall be registered in a name or names other than the name of the Holder, funds
sufficient to pay all transfer taxes payable as a result of such transfer shall
be paid by the Holder at the time of delivering the aforementioned notice or
promptly upon receipt of a written request of the Company for payment.

      If this Warrant shall be surrendered for exercise within any period during
which the transfer books for shares of the Common Stock purchasable upon the
exercise of this Warrant are closed for any purpose, then the Company shall not
be required to make delivery of certificates for the Common Stock purchasable
upon such exercise until the date of the reopening of said transfer books.

      1.2. Shares To Be Fully Paid and Nonassessable. All shares of Common Stock
issued upon the exercise of this Warrant shall be validly issued, fully paid and
nonassessable.

      1.3. No Fractional Shares To Be Issued. The Company shall not be required
to issue fractions of shares of Common Stock upon exercise of this Warrant. The
Holder may only elect to exercise this Warrant with respect to a whole number of
shares of the Common Stock.

      1.4. Securities Laws; Share Legend. The Holder, by acceptance of this
Warrant, agrees that this Warrant and all shares of Common Stock issuable upon
exercise of this Warrant will be disposed of only in accordance with the
Securities Act of 1933, as amended, and any successor Federal statue, and the
rules and regulations of the Commission

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<PAGE>

promulgated thereunder (the "Securities Act"). In addition to any other legend
which the Company may deem advisable under the Securities Act and applicable
state securities laws, all certificates representing shares of Common Stock (as
well as any other securities issued hereunder in respect of any such shares)
issued upon exercise of this Warrant shall be endorsed as follows:

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE
      STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OFFERED FOR SALE OR
      OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH
      REGISTRATION IS NOT REQUIRED.

      Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of counsel
(in form and substance reasonably satisfactory to the Company) selected by the
Holder of such certificate and reasonably acceptable to the Company, the
securities represented thereby need no longer be subject to restrictions on
resale under the Securities Act.

                                   ARTICLE II

                     WARRANT AGENCY; TRANSFER, EXCHANGE AND
                             REPLACEMENT OF WARRANT

      2.1. Warrant Agency. Until such time, if any, as an independent agency
shall be appointed by the Company to perform services described herein with
respect to this Warrant (the "Warrant Agency"), the Company shall perform the
obligations of the Warrant Agency provided herein at its principal office
address or such other address as the Company shall specify by prior written
notice to the Holder.

      2.2. Ownership of Warrant. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any person
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article II.

      2.3. Transfer of Warrant. This Warrant may only be transferred to a
purchaser subject to and in accordance with this Section 2.3 and Section 1.4
hereof, and any attempted transfer which is not in accordance with this Section
2.3 and Section 1.4 hereof shall be null and void and the transferee shall not
be entitled to exercise any of the rights of the holder of this Warrant. The
Company agrees to maintain at the Warrant Agency books for the

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<PAGE>

registration of such transfers of Warrants, and transfer of this Warrant and all
rights hereunder shall be registered, in whole or in part, on such books, upon
surrender of this Warrant at the Warrant Agency in accordance with this Section
2.3, together with a written assignment of this Warrant, substantially in the
form of the assignment attached hereto as Annex 2, duly executed by the Holder
or its duly authorized agent or attorney-in-fact, with signatures guaranteed by
a bank or trust company or a broker or dealer registered with the NASD, and
funds sufficient to pay any transfer taxes payable upon such transfer. Upon
surrender of this Warrant in accordance with this Section 2.3, the Company
(subject to being satisfied that such transfer is in compliance with Section 1.4
hereof) shall execute and deliver a new Warrant or Warrants of like tenor and
representing in the aggregate the right to purchase the same number of shares of
Common Stock in the name of the assignee or assignees and in the denominations
specified in the instrument of assignment, and this Warrant shall promptly be
canceled. Notwithstanding the foregoing, a Warrant may be exercised by a new
holder without having a new Warrant issued. The Company shall not be required to
pay any Federal or state transfer tax or charge that may be payable in respect
of any transfer of this Warrant or the issuance or delivery of certificates for
Common Stock in a name other than that of the registered holder of this Warrant.

      2.4. Division or Combination of Warrants. This Warrant may be divided or
combined with other Warrants, in connection with the partial exercise of this
Warrant, upon surrender hereof and of any Warrant or Warrants with which this
Warrant is to be combined at the Warrant Agency, together with a written notice
specifying the names and denominations in which the new Warrant or Warrants are
to be issued, signed by the holders hereof and thereof or their respective duly
authorized agents or attorneys-in-fact. Subject to compliance with Sections 1.4
and 2.3 hereof as to any transfer which may be involved in the division or
combination, the Company 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.

      2.5. Loss, Theft, Destruction or Mutilation of Warrant Certificates. Upon
receipt by the Company of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or security (in
customary form) reasonably satisfactory to the Company, or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant and upon
reimbursement of the Company's reasonable incidental expenses, the Company will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,
a new Warrant of like tenor and representing the right to purchase the same
aggregate number of shares of Common Stock.

      2.6. Expenses of Delivery of Warrants. Except as otherwise expressly
provided herein, the Company shall pay all expenses (other than transfer taxes
as described in Section 2.3) and other charges payable in connection with the
preparation, issuance and delivery of Warrants hereunder and shares of Common
Stock upon the exercise hereof.

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<PAGE>

                                   ARTICLE III

                              ADJUSTMENT PROVISIONS

      3.1. Adjustments Generally. The Exercise Price and the number of shares of
Common Stock (or other securities or property) issuable upon exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events, as provided in this Article III.

      3.2. Common Share Reorganization and Stock Dividend Payments. If the
Company, at any time this Warrant is outstanding, (a) shall subdivide its
outstanding shares of Common Stock into a greater number of shares or
consolidate its outstanding shares of Common Stock into a smaller number of
shares (any such event being called a "Common Share Reorganization"), or (b) pay
a stock dividend (except scheduled dividends paid on preferred stock which
contain a stated dividend rate) or otherwise make a distribution or
distributions on shares of its Common Stock or on any other class of capital
stock payable in shares of Common Stock (any such event being called a "Stock
Dividend Payment"), then (i) the Exercise Price shall be adjusted, effective
immediately after the record date at which the holders of shares of Common Stock
are determined for purposes of a Common Share Reorganization or at which the
holders of shares of Common Stock or any other class of capital stock are
determined for purposes of a Stock Dividend Payment, as the case may be, to a
price determined by multiplying the Exercise Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on such record date before giving effect to
such Common Share Reorganization or Stock Dividend Payment, as the case may be,
and the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such Common Share Reorganization or Stock
Dividend Payment, as the case may be, and (ii) the number of shares of Common
Stock subject to purchase upon exercise of this Warrant shall be adjusted,
effective at such time, to a number determined by multiplying the number of
shares of Common Stock subject to purchase immediately before such Common Share
Reorganization or Stock Dividend Payment, as the case may be, by a fraction, the
numerator of which shall be the number of shares outstanding after giving effect
to such Common Share Reorganization or Stock Dividend Payment, as the case may
be, and the denominator of which shall be the number of shares of Common Stock
outstanding immediately before such Common Share Reorganization or Stock
Dividend Payment, as the case may be.

      3.3. Capital Reorganization. If, at any time this Warrant is outstanding,
there shall be any consolidation or merger to which the Company is a party,
other than a consolidation or a merger in which the Company is a continuing
corporation and which does not result in any reclassification of, or change
(other than a Common Share Reorganization, Stock Dividend Payment or a change in
par value) in, outstanding shares of Common Stock, or any sale or conveyance of
the property of the Company as an entirety or substantially as an entirety (any
such event being called a "Capital Reorganization"), then, effective upon the
effective date of such Capital Reorganization, the Holder shall have the right
to purchase, upon exercise of this Warrant, the kind and amount of shares of
stock and other securities

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<PAGE>

and property (including cash) which the Holder would have owned or have been
entitled to receive after such Capital Reorganization if this Warrant had been
exercised immediately prior to such Capital Reorganization. As a condition to
effecting any Capital Reorganization, the Company or the successor or surviving
corporation, as the case may be, shall execute and deliver to the Holder and to
the Warrant Agency an agreement as to the Holder's rights in accordance with
this Section 3.3, providing for subsequent adjustments as nearly equivalent as
may be practicable to the adjustments provided for in this Article III. The
provisions of this Section 3.3 shall similarly apply to successive Capital
Reorganizations.

      3.4. Adjustment Rules. (a) Any adjustments pursuant to this Article III
shall be made successively whenever an event referred to herein shall occur.

            (b) If the Company shall set a record date to determine the holders
of shares of Common Stock or any other class of capital stock, as the case may
be, for purposes of a Common Share Reorganization, Stock Dividend Payment or
Capital Reorganization and shall legally abandon such action prior to effecting
such action, then no adjustment shall be made pursuant to this Article III in
respect of such action.

      3.5. Notice of Adjustments. The Company shall give notice to the Holder
prior to any record date or effective date, as the case may be, in respect of
any Common Share Reorganization, Stock Dividend Payment or Capital
Reorganization describing, in each case, such event in reasonable detail and
specifying such record date or effective date, as the case may be. In addition,
after the record date or effective date, as the case may be, of any Common Share
Reorganization, Stock Dividend Payment or Capital Reorganization, the Company
shall promptly give notice to the Holder of such event, describing such event in
reasonable detail and specifying the record date or effective date, as the case
may be, and, if determinable, the required adjustment and the computation
thereof. If the required adjustment is not determinable at the time of such
notice, the Company shall give notice to the Holder of such adjustment and
computation promptly after such adjustment becomes determinable.

      3.6. Adjustment by Board of Directors. If any event occurs as to which, in
the opinion of the Board of Directors of the Company, the provisions of this
Article III are not strictly applicable or if strictly applicable would not
fairly protect the rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
may make, in its discretion, an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such rights as aforesaid, but in no event shall any adjustment have the
effect of increasing the Exercise Price or decreasing the number of shares of
Common Stock into which the Warrant is exercisable as otherwise determined
pursuant to any of the provisions of this Article III except in the case of a
combination of shares of a type contemplated in Section 3.2 and then in no event
to an amount larger than the Exercise Price as adjusted pursuant to Section 3.2.

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<PAGE>

                                   ARTICLE IV

                      CALL OPTION AND TRANSFER RESTRICTIONS

      4.1. Company Right to Purchase. The Holder hereby grants to the Company
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 share of Common Stock for
which this Warrant is then exercisable (the "Call Price"); provided, however,
that the Call Option shall only be exercisable (a) if, at any time after the
Exercise Date, the closing price of the Common Stock for ten (10) consecutive
trading days equals or exceeds $3.12 per share and (b) if a registration
statement under the Securities Act is effective on the Call Date that registers
all the Common Stock issuable upon the exercise of this Warrant (the
"Registrable Stock"). The Company agrees (i) to prepare and file with the
Commission 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
Securities 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. In connection therewith, the Company will as expeditiously as
possible:

      (i) furnish to each seller of Registrable Stock such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Stock owned by such
seller;

      (ii) use its reasonable best efforts to register or qualify such
Registrable Stock under the securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Stock owned by such seller,
provided that the Company will not be required (A) to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subparagraph, (B) to subject itself to taxation in any such
jurisdiction or (C) to consent to general service of process in any such
jurisdiction;

      (iii) notify each seller of such Registrable Stock, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Company will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such

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<PAGE>

Registrable Stock, such prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements therein
not misleading;

      (iv) cause all such Registrable Stock to be listed on each securities
exchange on which similar securities issued by the Company are then listed and
to be qualified for trading on each system on which similar securities issued by
the Company are from time to time qualified;

      (v) provide a transfer agent and registrar for all such Registrable Stock
not later than the effective date of such registration statement and thereafter
maintain such a transfer agent and registrar; and

      (vi) use its reasonable best efforts promptly to obtain the withdrawal of
any stop order that is issued suspending the effectiveness of such registration
statement, or of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any Registrable Stock included in
such registration statement for sale in any jurisdiction.

      4.2 Notice to Holder. If the Company elects to exercise its Call Option
pursuant to this Article IV, then at least fifteen (15) Business Days but not
more than sixty (60) Business Days before the Call Date, the Company shall mail
or cause to be mailed a redemption notice (the "Notice") by first-class mail to
Holder at Holder's address as it appears on the books maintained by the Warrant
Agency. The Notice shall state: (a) the Call Date; (b) the Call Price; (c) the
Exercise Price; (d) that this Warrant must be presented and surrendered to the
Warrant Agency to collect the Call Price; (e) 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"); (f) that,
if the Holder wishes to exercise this Warrant, the Holder must satisfy the
requirements of Article I hereof prior to the Exercise Termination Date; and (g)
that, unless the Company 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 the Warrant Agency.

      4.3 Payment upon Surrender of Warrant. If the Company elects to exercise
its Call Option pursuant to this Article IV, and the Holder does not exercise
this Warrant prior to the Exercise Termination Date, then the Company shall pay
the Call Price to the Holder in accordance with the Notice upon presentation and
surrender by the Holder of this Warrant to the Warrant Agency.

                                    ARTICLE V

                                   DEFINITIONS

      The following terms, as used in this Warrant, have the following
respective meanings:

      "Business Days" means each day in which banking institutions in Atlanta,
Georgia are not required or authorized by law or executive order to close.

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<PAGE>

      "Call Date" means the Business Day fixed by the Company upon which this
Warrant shall be called in accordance with Article IV and identified in the
Notice as the Call Date.

      "Call Option" has the meaning set forth in Section 4.1.

      "Call Price" has the meaning set forth in Section 4.1.

      "Capital Reorganization" has the meaning set forth in Section 3.3

      "Commission" means the Securities and Exchange Commission.

      "Common Share Reorganization" has the meaning set forth in Section 3.2.

      "Common Stock" has the meaning set forth in the first paragraph of this
Warrant.

      "Company" has the meaning set forth in the first paragraph of this
Warrant.

      "Eligible Holder" means the Holder and any permitted transferee of the
Holder pursuant to and in accordance with this Warrant and the Registration
Rights Agreement.

      "Exercise Date" has the meaning set forth in the first paragraph of this
Warrant.

      "Exercise Price" means US $1.56 per share of Common Stock.

      "Exercise Termination Date" has the meaning set forth in Section 4.2.

      "Expiration Date" has the meaning set forth in the first paragraph of this
Warrant.

      "Holder" has the meaning set forth in the first paragraph of this Warrant.

      "NASD" means The National Association of Securities Dealers, Inc.

      "Notice" has the meaning set forth in Section 4.2.

      "Registrable Stock" has the meaning set forth in Section 4.1.

      "Registration Rights Agreement" means the Registration Rights Agreement of
even date herewith by and among the Company and the purchasers of the Warrants.

      "Securities Act" has the meaning set forth in Section 1.4.

      "Stock Dividend Payment" has the meaning set forth in Section 3.2.

      "Warrant Agency" has the meaning set forth in Section 2.1.

      "Warrants" means this Warrant and the other Warrants issued in connection
with the Company's February 2006 private equity financing.

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<PAGE>

                                   ARTICLE VI

                                  MISCELLANEOUS

      6.1. Governing Law. This Warrant shall be governed in all respects by the
laws of the State of Georgia, without reference to its conflicts of law
principles.

      6.2. Covenants To Bind Successor and Assigns. All covenants, stipulations,
promises and agreements contained in this Warrant by or on behalf of the Company
shall bind its successors and assigns, whether or not so expressed.

      6.3. Entire Agreement. This Warrant constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and no party shall be liable or bound to any other party in any
manner by any warranties, representations, or covenant except as specifically
set forth herein or therein.

      6.4. Waivers and Amendments. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Holder are cumulative and not exclusive of any rights
or remedies which it would otherwise have. The provisions of this Warrant may be
amended, modified or waived with (and only with) the written consent of the
Company and the Holders of a majority in interest of the Warrants then
outstanding; provided, however, that no such amendment, modification or waiver
shall, without the written consent of the Holders of any Warrant, (a) change the
number of shares of Common Stock subject to purchase upon exercise of such
Warrant, the Exercise Price or provisions for payment thereof or (b) amend,
modify or waive the provisions of Section 6.4 of such Warrant.

      Any such amendment, modification or waiver effected pursuant to this
Section shall be binding upon the Holders of all Warrants and upon the Company,
except as provided in the proviso to the last sentence of the preceding
paragraph. In the event of any such amendment, modification or waiver the
Company shall give prompt notice thereof to all holders of Warrants and, if
appropriate, notation thereof shall be made on all Warrants thereafter
surrendered for registration of transfer or exchange.

      6.5 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,

                                       10
<PAGE>

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 books maintained by the Warrant Agency,
unless the Holder shall notify the Company and the Warrant Agency 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 the Company, such notices and communications shall be
addressed as follows: Attention: Chief Financial Officer, Verso Technologies,
Inc., 400 Galleria Parkway, Suite 200, Atlanta, Georgia 30339.

      6.6 Survival of Agreements; Representations and Warranties, etc. All
warranties, representations and covenants made by the Company herein shall be
considered to have been relied upon by the Holder and shall survive the issuance
and delivery of the Warrant, regardless of any investigation made by the Holder,
and shall continue in full force and effect so long as this Warrant is
outstanding.

      6.7 Severability. In case any one or more of the provisions contained in
this Warrant shall be held to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

      6.8 Section Headings. The section headings used herein are for convenience
of reference only, do not constitute a part of this Warrant and shall not affect
the construction of or be taken into consideration in interpreting this Warrant.

      6.9 No Rights as Shareholder; No Limitations on Company Action. This
Warrant shall not entitle the Holder to any rights as a shareholder of the
Company. No provision of this Warrant and no right or option granted or
conferred hereunder shall in any way limit, affect or abridge the exercise by
the Company of any of its corporate rights or powers to recapitalize, amend its
certificate of incorporation, reorganize, consolidate or merge with or into
another corporation or to transfer all or any part of its property or assets, or
the exercise of any other of its corporate rights or powers.

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

                                            VERSO TECHNOLOGIES, INC.

                                            By: ______________________________
                                                Name: Juliet M. Reising
                                                Title: Chief Financial Officer

                                       11
<PAGE>

                                                                         Annex 1

                               SUBSCRIPTION NOTICE

                                                          Dated:________________

      The undersigned hereby irrevocably elects to exercise the right of
purchase evidenced by the attached Warrant for, and to purchase thereunder,
__________ shares of Common Stock of Verso Technologies, Inc. as provided for
therein. The undersigned tenders herewith payment of the Exercise Price for such
shares in the form of cash, money order, certified or bank cashier's check or
wire transfer. Any term with initial capital letters used herein but not defined
herein shall have the meaning ascribed to it in the attached Warrant.

                  Instructions for Registration of Common Stock

      Please issue a certificate or certificates for such shares of Common Stock
in the following name or names and denominations:

Name:_________________________________________________
         (Please typewrite or print in block letters.)

Address:______________________________________________

Denomination:_________________________________________

                         Representations and Warranties

      In connection with the exercise of the attached Warrant, the undersigned
hereby represents and warrants that:

      (i) unless registered pursuant to a Registration Rights Agreement or
otherwise, it recognizes that the shares of Common Stock issuable pursuant to
the attached Warrant have not been registered under the Securities Act, or any
applicable state securities laws, and may not transferred, sold, or offered for
sale unless registered pursuant to the Securities Act and all applicable state
securities laws or unless an exemption from such registration is available and
the Company has received an opinion to that effect from counsel reasonably
satisfactory to the Company;

<PAGE>

      (ii) it recognizes that the shares of Common Stock issuable pursuant to
the attached Warrant are subject to, and are transferable only upon compliance
with, the provisions of the Registration Rights Agreement and the attached
Warrant;

      (iii) if the undersigned is an individual, then the undersigned is an
"accredited investor" as that term is defined in Rule 501(a)(5) or (6) of
Regulation D promulgated under the Securities Act by reason that the undersigned
is an individual (i) having an individual net worth, or a joint net worth with
the undersigned's spouse, at the time of the purchase that exceeds $1,000,000,
or (ii) who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with the undersigned's spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year; or, if the undersigned is a corporation
or other entity, then the undersigned is an "accredited investor" as that term
is defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under
the Securities Act; and

      (iv) it is purchasing the shares of Common Stock for investment and not
with a view to resale or distribution or any present intention to resell or
distribute, except in compliance with the Securities Act and all applicable
state securities laws.

                             Issuance of New Warrant

      If said number of shares shall not be all the shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such shares.

Signature: ____________________________________________________________________
           Note: The above signature should correspond exactly with the name on
                 the face of the attached Warrant or with the name of the
                 assignee appearing in the assignment form below.

Printed Name: ______________________________

Title: _____________________________________

                                Page 2 of Annex 1

<PAGE>

                                                                         Annex 2

                                   Assignment

      For value received, the undersigned hereby sells, assigns and transfers
unto:

Name:________________________________________________
         (Please type or print in block letters)

Address:_____________________________________________

the right to purchase Common Stock (as defined in the attached Warrant)
represented by the attached Warrant to the extent of _______________ shares as
to which such right is exercisable and does hereby irrevocably constitute and
appoint ________________________________________, attorney-in-fact, to transfer
said Warrant on the books of Verso Technologies, Inc., with full power of
substitution in the premises.

Dated:________________

Signature:__________________________________________________________________
             Note: The above signature should correspond exactly with the name
                   on the face of the attached Warrant.

Printed Name: ______________________________

Title: _____________________________________

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