Document:

EX-4.5 REGISTRATION RIGHTS AGREEMENT

 

Exhibit 4.5

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement”) is made and entered into as of September
20, 2006, by and between Verso Technologies, Inc., a Minnesota (the “Company”), and Laurus Master
Fund, Ltd. (the “Purchaser”).

          This Agreement is made pursuant to the Security Agreement, dated as of the date hereof, by and
among the Purchaser, the Company and various subsidiaries of the Company (as amended, modified or
supplemented from time to time, the “Security Agreement”), and pursuant to the Warrants referred to
therein.

          The Company and the Purchaser hereby agree as follows:

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

          “Commission” means the Securities and Exchange Commission.

          “Common Stock” means shares of the Company’s common stock, par value $0.01 per share.

          “Effectiveness Date” means, (i) with respect to the Registration Statement required to be
filed in connection with the Warrants issued on the date hereof, a date no later than one hundred
eighty (180) days following such date and (ii) with respect to each additional Registration
Statement required to be filed hereunder (if any), a date no later than sixty (60) days following
the applicable Filing Date.

          “Effectiveness Period” has the meaning set forth in Section 2(a).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor
statute.

          “Filing Date” means, with respect to (1) the Registration Statement required to be filed in
connection with the shares of Common Stock issuable to the Holder upon exercise of a Warrant, the
date which is sixty (60) days after the issuance of such Warrant, and (2) the Registration
Statement required to be filed in connection with the shares of Common Stock issuable to the Holder
as a result of adjustments to the Exercise Price made pursuant to Section 4 of the Warrant or
otherwise, sixty (60) days after the occurrence of such event or the date of the adjustment of the
Exercise Price.

          “Holder” or “Holders” means the Purchaser or any of its affiliates or transferees to the
extent any of them hold Registrable Securities, other then those purchasing Registrable Securities
in a market transaction.

Registration Rights Agreement

 

 

          “Indemnified Party” has the meaning set forth in Section 5(c).

          “Indemnifying Party” has the meaning set forth in Section 5(c).

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

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

          “Registrable Securities” means the shares of Common Stock issuable upon exercise of the
Warrants.

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

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

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

          “Securities Act” means the Securities Act of 1933, as amended, and any successor statute.

          “Security Agreement” has the meaning given to such term in the Preamble hereto.

          “Trading Market” means any of the NASD Over The Counter Bulletin Board, the NASDAQ Capital
Market, the NASDAQ National Market, the American Stock Exchange or the New York Stock Exchange.

          “Warrants” means the Common Stock purchase warrants issued in connection with the Security
Agreement, whether on the date thereof or thereafter.

					
	 	 	 	 	 
	 	 	 	 	 
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     2. Registration.

          (a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a
Registration Statement covering the Registrable Securities for a selling stockholder resale
offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement shall
be on Form S-3 (except if the Company 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). The Company shall use its commercially reasonable efforts to cause each
Registration Statement to become effective and remain effective as provided herein. The Company
shall use its commercially reasonable efforts to cause each Registration Statement to be declared
effective no later than the Effectiveness Date. The Company shall use its commercially reasonable
efforts to keep each Registration Statement continuously effective under the Securities Act until
the date which is the earlier date of when (i) all Registrable Securities covered by such
Registration Statement have been sold or (ii) all Registrable Securities covered by such
Registration Statement may be sold immediately without registration under the Securities Act and
without volume restrictions pursuant to Rule 144(k), as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Holders (each, an “Effectiveness Period”).

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

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

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

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

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

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

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

          (f) immediately notify the Purchaser at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event of which the
Company has knowledge as a result of which the Prospectus contained in such Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and

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

          Notwithstanding anything herein to the contrary, upon written notice from the Company, the
Company may require that the Holders suspend offers and sales of Registrable Securities pursuant to
Section 7 hereof due to the fact that (1) (a) there is material non-public information regarding
the Company which the Company’s Board of Directors (the “Board”), after advice of legal counsel,
reasonably determines not to be in the Company’s best interest to disclose and which the Company is
not otherwise required to then disclose or (b) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or other similar
transaction available to the Company which the Board reasonably determines would be seriously
detrimental to the Company and its shareholders to then disclose, and which the Company would be
required to disclose in a Registration Statement; provided that such period (a
“Blackout Period”) shall end on the earlier to occur of (i) the date upon which the circumstances
that give rise to the commencement of the period would no longer cause the registration and
distribution of the Registrable Securities to be seriously detrimental to the Company and its
shareholders and (ii) such time as the Company (A) notifies the Holders that the Company will no
longer delay such filing of the registration statement, (B) recommences steps to make such
registration statement effective or (c) allows sales pursuant to such registration statement to
resume; provided further in no event shall the aggregate Blackout

					
	 	 	 	 	 
	 	 	 	 	 
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Periods in any rolling 12-month period exceed 60 days in the aggregate for such 12-month
period.

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

     5. Indemnification.

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

          (b) In the event of a registration of the Registrable Securities under the Securities Act
pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company, and its
officers, directors and each other person, if any, who controls the Company within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which
the Company or such persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact which was
furnished in writing by the Purchaser to the Company expressly for use in (and such information is
contained in) the Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or

					
	 	 	 	 	 
	 	 	 	 	 
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arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company and each such person for any reasonable legal or other expenses incurred
by them in connection with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Purchaser will be liable in any such case if
and only to the extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished in writing to the Company by or on behalf of the Purchaser
specifically for use in any such document. Notwithstanding the provisions of this paragraph, the
Purchaser shall not be required to indemnify any person or entity in excess of the amount of the
aggregate net proceeds received by the Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.

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

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

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

     6. Representations and Warranties.

          (a) The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and,
except with respect to certain matters which the Company has disclosed to the Purchaser on
Schedule 12(u) to the Security Agreement, the Company has timely filed all proxy
statements, reports, schedules, forms, statements and other documents required to be filed by it
under the Exchange Act since December 31, 2005. The Company has filed (i) its Annual Report on
Form 10-K for the fiscal year ended December 31, 2005 and (ii) its Quarterly Report on Form 10-Q
for the fiscal quarters ended March 31, 2006 and June 30, 2006 (collectively, the “SEC Reports”).
Each SEC Report was, at the time of its filing, in substantial compliance with the requirements of
its respective form and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective filing dates, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC Reports comply as to
form in all material respects with applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted accounting principles
(“GAAP”) applied on a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be condensed) and fairly
present in all material respects the financial condition, the results of operations and the cash
flows of the Company and its subsidiaries, on a consolidated basis, as of, and for, the periods
presented in each such SEC Report.

          (b) The Common Stock is listed for trading on the NASDAQ Capital Market and satisfies all
requirements for the continuation of such listing, and the Company shall do all things necessary
for the continuation of such listing. Except as set forth on Schedule 12(v) to the Security
Agreement, the Company has not received any notice that its Common Stock will be delisted from the
NASDAQ Capital Market (except for prior notices which have been fully remedied) or that the Common
Stock does not meet all requirements for the continuation of such listing

          (c) Neither the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or solicited any

					
	 	 	 	 	 
	 	 	 	 	 
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offers to buy any security under circumstances that would cause the offering of the Securities
pursuant to the Security Agreement to be integrated with prior offerings by the Company for
purposes of the Securities Act which would prevent the Company from selling the Common Stock
pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder
approval provisions, nor will the Company or any of its affiliates or subsidiaries take any action
or steps that would cause the offering of the Common Stock to be integrated with other offerings
(other than such concurrent offering to the Purchaser).

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

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

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

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

     7. Miscellaneous.

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

          (b) No Piggyback on Registrations. Except as and to the extent set forth on Schedule 7(b)
hereto, neither the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in any Registration Statement other
than the Registrable Securities, and the Company shall not after the date hereof enter into any
agreement providing any such right for inclusion of shares in the Registration Statement to any of
its security holders. Except as and to the extent specified in Schedule 7(b)

					
	 	 	 	 	 
	 	 	 	 	 
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hereto, the Company has not previously entered into any agreement granting any registration
rights with respect to any of its securities to any Person that have not been fully satisfied.

          (c) Obligations of Holders. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to any Registration Statement. In connection with the
registration of Registrable Securities pursuant to any Registration Statement, each Holder shall:
(i) timely furnish to the Company a completed shareholder questionnaire in a form reasonably
acceptable to the Company and such information in writing regarding itself and the intended method
of disposition of such Registrable Securities as the Company shall reasonably request in order to
effect the registration thereof; (ii) notify the Company when it has sold all of the Registrable
Securities held by it; and (iii) notify the Company in the event that any information supplied by
such Holder in writing for inclusion in such Registration Statement or related Prospectus is untrue
or omits to state a material fact required to be stated therein or necessary to make such
information not misleading in light of the circumstances then existing.

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

					
	 	 	 	 	 
	 	 	 	 	 
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          (e) Piggy-Back Registrations. If at any time during any Effectiveness Period there is not an
effective Registration Statement covering all of the Registrable Securities required to be covered
during such Effectiveness Period and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account or the account of
others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8
(each as promulgated under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee benefit plans, then
the Company shall send to each Holder written notice of such determination and, if within fifteen
(15) days after receipt of such notice, any such Holder shall so request in writing, the Company
shall include in such registration statement all or any part of such Registrable Securities such
Holder requests to be registered, to the extent the Company may do so without violating
registration rights of others which exist as of the date of this Agreement, subject to customary
underwriter cutbacks applicable to all holders of registration rights and subject to obtaining any
required consent of any selling stockholder(s) to such inclusion under such registration statement.

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

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

	 	 	 	 	 	 	 
	 

	 	If to the Company:
	 	 	 	Verso Technologies, Inc.
	 

	 	 	 	 	 	400 Galleria Parkway
	 

	 	 	 	 	 	Suite 200
	 

	 	 	 	 	 	Atlanta, Georgia 30339
	 

	 	 	 	 	 	Attention: Chief Financial Officer
	 

	 	 	 	 	 	Facsimile: (678) 589-3780

					
	 	 	 	 	 
	 	 	 	 	 
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	 	 	 	 	 	with a copy to:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Rogers & Hardin LLP
	 

	 	 	 	 	 	2700 International Tower
	 

	 	 	 	 	 	229 Peachtree Street, NE
	 

	 	 	 	 	 	Atlanta, Georgia 30303
	 

	 	 	 	 	 	Attention: Robert C. Hussle, Esq.
	 

	 	 	 	 	 	Facsimile: (404) 525-2224
	 
	 	 	 	 	 	 
	 

	 	If to a Purchaser:
	 	 	 	To the address set forth under such Purchaser
name on the signature pages hereto.
	 
	 	 	 	 	 	 
	 

	 	If to any other Person who is
then the registered Holder:
	 	 	 	To the address of such Holder as it
appears in the stock transfer books of the Company

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

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

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

          (j) Governing Law, Jurisdiction and Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The
Company hereby consents and agrees that the state or federal courts located in the County of New
York, State of New York shall have exclusion jurisdiction to hear and determine any Proceeding
between the Company, on the one hand, and the Purchaser, on the other hand, pertaining to this
Agreement or to any matter arising out of or related to this Agreement; provided, that the
Purchaser and the Company acknowledge that any appeals from those courts may have to be heard by a
court located outside of the County of New York, State of New York, and further
provided, that nothing in this Agreement shall be deemed or operate to preclude the
Purchaser from bringing a Proceeding in any other jurisdiction to collect the obligations, to
realize on the Collateral or any other security for the obligations, or to enforce a judgment or
other court order in favor of the Purchaser. The Company expressly submits and consents in advance
to such jurisdiction in any Proceeding commenced in any such

					
	 	 	 	 	 
	 	 	 	 	 
	Registration Rights Agreement
	 	 
	 	 

11

 

court, and the Company hereby waives any objection which it may have based upon lack of
personal jurisdiction, improper venue or forum non conveniens. The Company hereby waives
personal service of the summons, complaint and other process issued in any such Proceeding and
agrees that service of such summons, complaint and other process may be made by registered or
certified mail addressed to the Company at the address set forth in Section 7(g) and that service
so made shall be deemed completed upon the earlier of the Company’s actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid. The parties hereto desire that
their disputes be resolved by a judge applying such applicable laws. Therefore, to achieve the
best combination of the benefits of the judicial system and of arbitration, the parties hereto
waive all rights to trial by jury in any Proceeding brought to resolve any dispute, whether arising
in contract, tort, or otherwise between the Purchaser and/or the Company arising out of, connected
with, related or incidental to the relationship established between then in connection with this
Agreement. If either party hereto shall commence a Proceeding to enforce any provisions of this
Agreement, the Security Agreement or any other Ancillary Agreement, then the prevailing party in
such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

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

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

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

[Balance of page intentionally left blank; signature page follows]

					
	 	 	 	 	 
	 	 	 	 	 
	Registration Rights Agreement
	 	 
	 	 

12

 

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

	 	 	 	 	 	 	 
	 	 	VERSO TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Juliet M. Reising	 	 
	 

	 	Name:
	 	Juliet M. Reising
	 	 
	 

	 	Title:
	 	EVP
& CFO
	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	LAURUS MASTER FUND, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ David Grin	 	 
	 

	 	Name:
	 	David
Grin
	 	 
	 

	 	Title:
	 	Director
	 	 
	 

	 	 	 	 

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

					
	 	 	 	 	 
	 	 	 	 	 
	Registration Rights Agreement
	 	 
	 	 

13

 

EXHIBIT A

                                        , 200                    

American Stock Transfer & Trust Company

Corporate Trust Department

59 Maiden Lane

New York, New York 10038

Attn: Joe Wolf

	 	 	 	Re: Verso Technologies, Inc. Registration Statement on Form
[S-3] (No. 333-___)

Ladies and Gentlemen:

     As counsel to Verso Technologies, Inc., a Minnesota (the “Company”), we have been requested to
render our opinion to you in connection with the resale by the individuals or entitles listed on
Schedule A attached hereto (the “Selling Shareholders”), of an aggregate of ___
shares (the “Shares”) of the Company’s common stock.

     A Registration Statement on Form [S-3] (No. 333-___) under the Securities Act of 1933, as
amended (the “Act”), with respect to the resale of the Shares was declared effective by the
Securities and Exchange Commission on [date]. Enclosed is the Prospectus dated [date]. We
understand that the Shares are to be offered and sold in the manner described in the Prospectus.

     Based upon the foregoing, upon request by any Selling Shareholder at any time while the
registration statement remains effective, and provided such shareholder represents to you that (i)
such shareholder has sold the Shares registered by the registration statement for such
shareholder’s account in accordance with the plan of distribution set forth in the Prospectus and
(ii) a copy of the Prospectus and all supplements thereto were delivered to the purchaser of the
Shares in accordance with the Act, then it is our opinion that the Shares have been registered for
resale under the Act and new certificates evidencing the Shares upon their transfer or
re-registration by the Selling Stockholders may be issued without restrictive legend. We will
advise you if the registration statement is not available or effective at any point in the future.

Very truly yours,

[Company counsel]

Registration Rights AgreementEX-4.6 WARRANT TO PURCHASE COMMON STOCK

 

Exhibit 4.6

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 192,000 SHARES OF COMMON STOCK OF

VERSO TECHNOLOGIES, INC.

			
	 	 	 
	No. [                    ]
	 	September 20, 2006

     THIS CERTIFIES THAT, for value received, J.P. Turner Partners, L.P. or its 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 September 20, 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 IV hereof.

ARTICLE I

EXERCISE OF WARRANTS

     1.1. Method of Exercise.

     (a) To exercise this Warrant in whole or in part, the Holder shall deliver to the Company at
the Warrant Agency: (i) this Warrant; (ii) 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 certificates are to be registered (the “Exercise Notice”);
and (iii) 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, wire transfer or, subject to and accordance with Section 1.1(b), by a
cash-less exercise of this Warrant.

     (b) If, as of the first anniversary of the Issue Date, an effective registration statement is
not available for the resale of the shares of Common Stock issuable upon exercise of this Warrant,
then, in lieu of exercising this Warrant for cash, the Holder may elect, at any time after such
anniversary, to receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being exercised) by surrender of this Warrant to the Company at the Warrant Agency,
together with the properly endorsed Exercise Notice, in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:

	 	 	 	 	 	 	 
	 

	 	X=
	 	Y(A-B)	 	 
	 

	 	 	 	 

A
	 	 
	 
	 	 	 	 	 	 
	 	 	Where X =	 	the number of shares of Common Stock to be issued to the Holder
	 
	 	 	 	 	 	 
	 	 	Y =	 	the number of shares of Common Stock purchasable under this Warrant or, if
only a portion of this Warrant is being exercised, the portion of this Warrant being
exercised (at the date of exercise)
	 
	 	 	 	 	 	 
	 	 	A =	 	the Fair Market Value of one share of Common Stock (at the date of exercise)
	 
	 	 	 	 	 	 
	 	 	B =	 	the Exercise Price per share (as adjusted to the date of exercise)

     (c) 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 an
Exercise Notice delivered pursuant to Section 1.1(a) or 1.1(b), 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 to
have exercised this Warrant and 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.

2

 

     (d) 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 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.

3

 

     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 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.

4

 

     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.

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

5

 

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 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.

6

 

ARTICLE IV

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.

     “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.

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

     “Exercise Price” means US $1.25 per share of Common Stock.

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

     “Exercise Notice” has the meaning set forth in Section 1.1(a).

     “Fair Market Value” means, with respect to a share of Common Stock as of a particular
date: (a) if the Common Stock is traded on the American Stock Exchange or another national exchange
or is quoted on the National or Capital Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then
the closing or last sale price, respectively, reported for the last business day immediately
preceding such date; (b) if the Common Stock is not traded on the American Stock Exchange or
another national exchange or on the Nasdaq but is traded on the NASD Over The Counter Bulletin
Board, then the mean of the average of the closing bid and asked prices reported for the last
business day immediately preceding such date; or (c) if the Common Stock is not publicly traded,
then as the Holder and the Company agree, or in the absence of agreement, by arbitration in
accordance with the rules then in effect of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and training to pass on the
matter to be decided.

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

     “NASD” means The National Association of Securities Dealers, Inc.

     “Securities Act” has the meaning set forth in Section 1.4.

7

 

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

     “Warrant Agency” has the meaning set forth in Section 2.1.

     “Warrant” means this Warrant.

ARTICLE V

MISCELLANEOUS

     5.1. 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.

     5.2. 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.

     5.3. 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.

     5.4. 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 Holder of this Warrant.

     5.5 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, 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.

8

 

     5.6 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.

     5.7 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.

     5.8 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.

     5.9 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:  	/s/ Steven A. Odom	 
	 	 	Name:  	Steven A. Odom 	 
	 	 	Title:  	Executive Chairman 	 
	 

9

 

Annex 1

EXERCISE NOTICE

			
	TO:	 	Verso Technologies, Inc.

400 Galleria Parkway

Suite 200

Atlanta, Georgia 30339

     Attention: Chief Financial Officer

     The undersigned, pursuant to the provisions set forth in the attached Warrant (No.___),
hereby irrevocably elects to purchase (check applicable box):

	 	 	 
	                    

	 	                                shares of the Common Stock covered by such Warrant; or
	 
	 	 
	                    

	 	                                shares of common stock covered by such Warrant pursuant
to the cashless exercise procedure set forth in Section 1.1(b) of
such Warrant.

     The undersigned herewith makes payment of the full Exercise Price for such shares at the price
per share provided for in such Warrant, which is $                    . Such payment takes the form of
(check applicable box or boxes):

	 	 	 
	                    

	 	$                     in cash or by money order, certified or bank
cashier’s check, or by wire transfer for such amount; and/or
	 
	 	 
	                    

	 	the cancellation of such number of shares of Common Stock
underlying this Warrant as is necessary, in accordance with the
formula set forth in Section 1.1(b), to exercise this Warrant
with respect to                      number of shares of Common Stock
purchasable pursuant to the cashless exercise procedure set forth
in Section 1.1(b).

     The undersigned requests that the certificates for such shares be issued in the name of, and
delivered to                                          whose address is                                         . The undersigned
also requests that the certificates for the shares be issued in the following denominations:
                                        .

     The undersigned represents and warrants that (i) all offers and sales by the undersigned of
the securities issuable upon exercise of the within Warrant shall be made pursuant to registration
of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), pursuant
to an exemption from registration under the Securities Act; and (ii) the undersigned is an
accredited investor within the meaning of Regulation D under the Securities Act.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Signature must conform to name of holder as specified on the face
of the Warrant)

 

 

	 	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 

Page 2 of Annex 1

 

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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