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.
TO PURCHASE 192,000 SHARES OF
COMMON STOCK OF
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No. [
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September 20, 2006
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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.
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:
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X=
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Y(A-B)
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A
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Where X
=
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the number of
shares of Common Stock to be issued to the Holder
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Y =
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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)
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A =
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the Fair Market
Value of one share of Common Stock (at the date of
exercise)
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B =
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the Exercise
Price per share (as adjusted to the date of exercise)
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(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.
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(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.
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.
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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
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