Guarantee

Guarantee Agreement

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VERSO TECHNOLOGIES INC | Valens Capital Management, LLC | VALENS US SPV I, LLC

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Title: Guarantee
Date: 4/15/2008
Industry: Computer Networks Sector: Technology

Guarantee, Parties: verso technologies inc , valens capital management llc , valens us spv i llc

EXHIBIT 10.186

HYPOTHECATION OF MOVABLES

BETWEEN:	VERSO TECHNOLOGIES CANADA INC., a legal person duly incorporated and subsisting under the laws of Canada , having its registered office at 4105 D Matte Blvd., in the City of Brossard, Quebec, J4Y 2P4, herein acting and represented by Martin D. Kidder, its President and Secretary, duly authorized in virtue of a Resolution of its Board of Directors duly enacted on January 15, 2008;

	(hereinafter referred to as the “ Grantor ”)

AND:	VALENS U.S. SPV I, LLC , a limited liability company duly incorporated and subsisting under the laws of Delaware, having its principal place of business c/o Valens Capital Management, LLC, 335 Madison Avenue, 10 th Floor, in the City of New York, U.S.A. 10017, herein acting and represented by Scott Bluestein, its authorized representative, duly authorized for the purposes hereof as declared,

	(hereinafter referred to as the “ Creditor ”)

WHEREAS the Creditor has entered and/or will enter into arrangements with the Debtor (as hereafter defined) whereby the Debtor is or may hereafter become indebted to the Creditor;

WHEREAS the Grantor has agreed to guarantee the payment of all indebtedness and the performance of all obligations which may become due from time to time to the Creditor;

WHEREAS the Grantor has agreed, as security for all obligations due by the Grantor to the Creditor from time to time, to hypothecate the “Charged Property” (as hereinafter defined) in favour of the Creditor; and

WHEREAS the Grantor carries on an enterprise;

THE PARTIES AGREE AS FOLLOWS:

PREAMBLE

1.1.	The preamble forms part hereof as if recited at length herein.

2.	DEFINITIONS

2.1.	Unless the context otherwise requires, the following expressions will have the respective meanings hereinafter set forth:

(a) “Charged Property” means all of the movable property enumerated and/or referred to in Clause 3.1 hereof;

(b) “Claims” means, collectively, all accounts receivable, book accounts, book debts, debts, claims, monies, rentals, revenues, incomes, loans receivable, demands, rebates, refunds, amounts owing by or claimable from the crown, state or government or any departments, agents or agencies thereof and choses in action which now are or which may at any time hereafter be due or owing to or owned by the Grantor or in which the Grantor now or hereafter has any other interest and all security interests, hypothecs, assignments, guarantees, bills of exchange, notes, chattel paper, negotiable instruments, contracts, invoices, books of account, letters of credit and other documents and rights now held or owned or which may be hereafter held or owned by the Grantor or any third party on behalf of the Grantor in respect of any of the foregoing and all rights of an unpaid vendor, including rights to merchandise returned, repossessed or recovered;

(i)

all costs and expenses (including, without limitation, all costs and expenses referred to herein and/or in the Security Agreement) which may hereafter be incurred, in any manner and under any circumstances, by and/or on behalf of the Creditor in and/or relating to (i) the enforcement of the Hypothec, (ii) the sale and/or disposal of any of the Charged Property forming the object of the Hypothec, and/or (iii) dealing with the Charged Property forming the object of the Hypothec;

(ii)

any and all fees, disbursements and applicable sales taxes incurred by any professionals (including, without limitation, any attorneys, receivers, trustees, monitors and/or consultants) which may hereafter be engaged by and/or on behalf of the Creditor or for which the Creditor may hereafter become obliged for and/or pertaining to (i) the enforcement of the Hypothec, (ii) the sale and/or disposal of any of the Charged Property forming the object of the Hypothec, and/or (iii) dealing with the Charged Property forming the object of the Hypothec; and

(iii)

any and all other costs and expenses, of any nature or form whatsoever, which may hereafter be incurred by and/or on behalf of the Creditor or for which the Creditor may hereafter become obliged, under any circumstances whatsoever, for and/or pertaining to (i) the enforcement of the Hypothec, (ii) the sale and/or disposal of any of the Charged Property forming the object of the Hypothec, and/or (iii) dealing with the Charged Property forming the object of the Hypothec,

to the extent that, in accordance with the Law, same are not secured by the Hypothec;

(d) “Debtor” means collectively, Verso Technologies, Inc., a corporation incorporated and subsisting under the laws of Georgia, Verso Backhaul Solutions, Inc., Telemate Net Software, Inc., Verso Verilink, LLC, Sentito Networks, Inc. and any other Eligible Subsidiary (as such term is defined in the Security Agreement) from time to time, as well as their respective successors and assigns;

(e) “Documents of Title” means, collectively, all documents of title, whether negotiable or non-negotiable including, without limitation, all warehouse receipts and bills of lading in which the Grantor now or hereafter has an interest;

(f) “Equipment” means, collectively, all machinery, equipment, furniture, fixtures, materials, supplies, appliances, dyes, molds, tanks, vehicles, furnaces, boilers, motors, engines, accessories and tools now owned or hereafter acquired by the Grantor, whether or not the same be affixed to any immovable property or used upon or in connection therewith, together with all present and future improvements, appurtenances and accessories thereto;

(g) “Guarantee” means that certain Guarantee executed by the Grantor in favour of the Creditor, Laurus Master Fund, Ltd. and Valens Offshore SPV II, Corp. on or about the date hereof, pursuant to which the Grantor has guaranteed the payment of all indebtedness and the performance of all obligations due from time to time by the Debtor to the Creditor under the Security Agreement;

(h) “Hypothec” means collectively the hypothecation and the additional hypothecation of the Charged Property by the Grantor in favour of the Creditor created pursuant to Clauses 3.1 and 3.2 hereof;

(i) “Hypothec Amount” means the sum of One Million Dollars ($1,000,000) ;

(j) “Insurance” means, collectively, all insurance policies relating directly or indirectly to any of the Charged Property or any part thereof and all rights and claims under all policies of insurance of whatever nature including, without limitation, under life insurance policies and under insurance against loss or damage;

(k) “Intangible Property” means, collectively, all incorporeal property now owned or hereafter acquired by the Grantor or its interest therein including, without limitation, all patents and patents pending, registered and unregistered trade marks, trade or brand names, service marks, copyrights, industrial designs, formulae, processes, trade secrets, goodwill, contractual rights, licences and permits;

(l) “Interest Rate” means Twenty-Five percent (25%) per annum;

(m) “Inventory” means, collectively, all property in stock and inventory now owned and hereafter acquired by the Grantor including, without limitation, all raw materials, goods in process, finished goods, goods in transit and all packaging and shipping materials and all materials and merchandise procured for the manufacture or production thereof and all goods, wares and merchandise held for sale, lease or resale or furnished or to be furnished under contracts for service or used or consumed in the business of the Grantor;

(n) “Law” means the Civil Code of Québec;

(o) “Monies” means, collectively, all monies, cash, foreign currencies and credits in which the Grantor now or hereafter has an interest;

(p) “ Notes ” shall have the meaning ascribed thereto in the Security Agreement;

(q) “Obligations” means and includes all debts, liabilities and obligations owing by the Grantor to the Creditor arising under, out of, or in connection with the Guarantee and in connection with any documents, instruments or agreements relating to or executed in connection with the Guarantee or any documents, instruments or agreements referred to therein or otherwise, and in connection with any other indebtedness, obligations or liabilities of the Grantor to the Creditor, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise, in each case, irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefore or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations, in any case commenced by or against the Grantor under Title 11, United States Code , the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act , including, without limitation, obligations or indebtedness of the Grantor for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case;

(r) “Proceeds” means, collectively, all property in any form derived directly or indirectly from any dealings with any of the Charged Property including:

(i)	identifiable or traceable personal or movable property that is derived directly or indirectly with any dealing with the Charged Property or proceeds of the Charged Property and in which the Grantor acquires an interest;

(ii)	an insurance or other payment that represents indemnity or compensation for loss of or damage to the Charged Property or proceeds of the Charged Property or a right to such a payment; and

(iii)

a payment made in total or partial discharge or redemption of chattel paper, a security, an instrument, an intangible or incorporeal property;

(s) “Records” means, collectively, all computer programs, firmware and software and all computer and other records and data, whether in hard copy or otherwise, pertaining to any of the Charged Property and the equipment containing same and owned by the Grantor;

(t) “Securities” means, collectively, all shares, stocks, warrants, bonds, debentures, debenture stock, and other securities, now or hereafter owned and/or held by the Grantor, in which the Grantor now or hereafter has an interest;

(u) “Security” means the Hypothec and rights created in the Creditor’s favour hereunder; and

(v) “ Security Agreement ” means that certain “Security Agreement” dated as of September 20, 2006 executed among, inter alia , Verso Technologies, Inc. and Laurus Master Fund, Ltd. (in respect of which there has been a partial assignment of rights in favour of each of the Creditor and Valens Offshore SPV II, Corp. in virtue of that certain “Assignment of Loans, Liens and Documents” dated as of December 21, 2007), as amended, restated, renewed, modified, replaced and/or supplemented from time to time.

3.	HYPOTHEC AND ADDITIONAL HYPOTHEC

3.1.

Hypothec

As continuing and collateral security for the payment and the fulfillment of the Obligations by the Grantor to and in favour of the Creditor as well as the payment and fulfillment of all of the obligations of the Grantor hereunder, the Grantor hereby hypothecates to and in favour of the Creditor for and in the Hypothec Amount together with interest thereon at the Interest Rate (both before and after maturity, demand, default and judgment), the following movable property of the Grantor, wherever situate, and all renewals thereof, accretions thereto, replacements thereof, substitutions therefore as well as everything united thereto by accession, namely:

3.1.1 As a universality, the Claims;

3.1.2 As a universality, the Documents of Title;

3.1.3 As a universality, the Proceeds;

3.1.4 As a universality, the Records;

3.1.5 As a universality, the Monies;

3.1.6 As a universality, the Securities;

3.1.7 As a universality, the Insurance;

3.1.8 As a universality, the Intangible Property;

3.1.9 As a universality, the Inventory;

3.1.10 As a universality, the Equipment; and

3.1.11 As a universality, all other corporeal and incorporeal movable property, assets, rights and undertakings of any nature and kind, now owned or hereafter acquired by the Grantor.

3.2.	Additional Hypothec

In order to further secure the performance and observance of all the Grantor’s obligations hereunder, the Grantor hereby further hypothecates all of the Charged Property to and in favour of the Creditor for and in an additional amount equal to twenty-percent (20%) of the Hypothec Amount.

3.3.	Dealings with Charged Property

Notwithstanding the existence of the Security over the Charged Property:

(a) Subject to Clause 6 hereof, the Creditor authorizes the Grantor to collect the Claims as they fall due; and

(b) Until such time as an Event of Default has occurred and is continuing, nothing will prevent the Grantor from selling, disposing of or dealing with any of the Inventory in the ordinary course of its business,

provided that the Security shall continue to extend to any proceeds resulting from the disposition of any Inventory and on any rights to such Inventory which are retained or reacquired at any time by the Grantor.

3.4.	Voting and Other Rights

3.4.1 Should any of the Charged Property consist of any shares, bonds, debentures, warrants or any other securities or instruments entitling the Grantor to exercise any voting rights, redemption rights, conversion rights or any other rights or privileges whatsoever, the Creditor shall, if an Event of Default has occurred and is continuing, be entitled (but not obliged) to become the registered or named holder or beneficiary thereof as well as to fully exercise all of such rights or privileges on behalf of the Grantor and in such manner and at such times as the Creditor deems appropriate. The Creditor's becoming the registered or named holder or beneficiary of any Charged Property or the Creditor's exercise of any of such rights or privileges shall neither necessitate nor constitute the exercise by the Creditor of any of its rights under Clause 5 .1 hereof. The Creditor shall not, in any manner whatsoever, be responsible or liable to the Grantor or any other person(s) resulting from eit

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