bpo_ex1046-100407.htm


    
      

    

     

    Exhibit
      10.46

     

     

    
      AMENDMENT
        TO SERIES J WARRANT TO PURCHASE SHARES OF PREFERRED STOCK OF BPO MANAGEMENT
        SERVICES, INC.

       

      This
        Amendment to Series J Warrant to Purchase Shares of Preferred Stock of BPO
        Management Services, Inc. (this “Amendment”) is effective as of
        September __, 2007, by BPO Management Services, Inc., a Delaware corporation
        (“Issuer”), in favor of ____________________
        (“Holder”).  Issuer and Holder are, together, the
“Parties.”

       

      RECITALS

       

      WHEREAS,
        Issuer previously granted to Holder that certain Series J Warrant to Purchase
        Shares of Preferred Stock of Issuer, which was numbered W-J-07-__, was dated
        and
        issued June 13, 2007 (the “Series J Warrant”), and
        entitled Holder to exercise the Series J Warrant in accordance with the terms
        contained therein for the purchase of up to ___________ shares of Issuer’s
        Series D-2 Convertible Preferred Stock (the “Series J Covered
        Shares”) at an initial per-share Warrant Price (as defined in Section 9
        of the Series J Warrant) of $14.40 (the “Series J Original Warrant
        Price”);

       

      WHEREAS,
        Issuer also previously granted to Holder (a) that certain Series A Warrant
        to
        Purchase Shares of Common Stock of Issuer, which was numbered W-A-07-__,
        was
        dated and issued June 13, 2007 (the “Series A Warrant”),
        and entitled Holder to exercise the Series A Warrant in accordance with the
        terms contained therein for the purchase of up to ________ shares of Issuer’s
        Common Stock at an initial per-share Warrant Price (as defined in Section
        9 of
        the Series A Warrant) of $0.90; (b) that certain Series B Warrant to Purchase
        Shares of Common Stock of Issuer, which was numbered W-B-07-__, was dated
        and
        issued June 13, 2007 (the “Series B Warrant”), and
        entitled Holder to exercise the Series B Warrant in accordance with the terms
        contained therein for the purchase of up to ___________ shares of Issuer’s
        Common Stock at an initial per-share Warrant Price (as defined in Section
        9 of
        the Series B Warrant) of $1.25; (c) that certain Series C Warrant to Purchase
        Shares of Common Stock of Issuer, which was numbered W-C-07-__, was dated
        and
        issued June 13, 2007 (the “Series C Warrant”), and
        entitled Holder to exercise the Series C Warrant in accordance with the terms
        contained therein for the purchase of up to ___________ shares of Issuer’s
        Common Stock (the “Series C Covered Shares”) at an initial
        per-share Warrant Price (as defined in Section 9 of the Series C Warrant)
        of
        $1.35 (the “Series C Original Warrant Price”); and (d) that
        certain Series D Warrant to Purchase Shares of Common Stock of Issuer, which
        was
        numbered W-D-07-__, was dated and issued June 13, 2007 (the “Series
        D Warrant” and together with the Series J Warrant, the Series A
        Warrant, the Series B Warrant, and the Series C Warrant, the
“Warrants”), and entitled Holder to exercise the Series D
        Warrant in accordance with the terms contained therein for the purchase of
        up to
        ___________ shares of Issuer’s Common Stock (the “Series D Covered
        Shares”) at an initial per-share Warrant Price (as defined in Section 9
        of the Series D Warrant) of $1.87 (the “Series D Original Warrant
        Price”);

       

      WHEREAS,
        Issuer has determined that, in lieu of procuring mezzanine level financing
        from
        otherwise unaffiliated third parties (as originally contemplated by such
        parties) in order to finance the potential acquisition by Issuer of a private
        entity providing data center outsourcing services to clients located throughout
        the United States for more than 10 years (the “Potential
        Acquisition”), it will provide an enhanced opportunity to obtain such
        financing from Holder and certain other parties who received warrants at
        the
        same time and on the same terms as the Warrants (the “Other Warrant
        Holders”), by offering a reduction to the Series J Original Warrant
        Price for up to 75% of the Series J Covered Shares, which reduction shall
        be
        available until October 10, 2007;

       


      
        
           

        

        
          
          

          
            

          

        

        
           

        

      


      


       

      WHEREAS,
        Issuer has agreed that, since it believes it will be able to obtain the funds
        it
        needs to complete the Potential Acquisition (if Issuer determines to proceed
        with such Potential Acquisition) from the exercise of Series J Warrants held
        by
        Holder and Other Warrant Holders, it has concluded that it will not need
        to and,
        therefore, will not enter into, create, incur, assume, guarantee or suffer
        to
        exist any Indebtedness (as defined in that certain Series D Convertible
        Preferred Stock Purchase Agreement dated as of June 13, 2007, among Issuer,
        Holder and Other Warrant Holders (the “Purchase Agreement”)),
        except as listed on Schedule 2.1(k) to the Purchase Agreement;

       

      WHEREAS,
        in furtherance of the foregoing, Issuer has also determined that, in the
        event
        that Holder exercises any portion of the Series J Covered Shares affected
        by
        such reduction to the Series J Original Warrant Price, the Series C Original
        Warrant Price and Series D Original Warrant Price shall be reduced by amendments
        to the Series C Warrant and the Series D Warrant  effective for the
        remainder of the term of the Series C Warrant and the Series D Warrant,
        respectively, to $0.01 per share and $1.10 per share, respectively, for the
        same
        percentage of the Series C Covered Shares and Series D Covered Shares as
        the
        percentage of such Series J Covered Shares exercised between the date hereof
        and
        October 10, 2007 (i.e., if Holder exercises one-quarter (1/4) of the
        Series J Covered Shares during said period, the Series C Original Warrant
        Price
        and the Series D Original Warrant Price shall be reduced as described herein
        for
        one-quarter (1/4) of the Series C Covered Shares and Series D Covered
        Shares);

       

      WHEREAS,
        Section 11 of the Series J Warrant requires that the Series J Warrant may
        only
        be amended by written instrument(s) executed by Issuer and the holders of
        warrants exercisable for a majority of the shares of Series D-2 Convertible
        Preferred Stock of Issuer issuable upon exercise of the then-outstanding
        Series
        J Warrants issued to Holder and the Other Warrant Holders (the “Majority
        Holders”);

       

      WHEREAS,
        Issuer shall be deemed to have obtained the signature of the Majority Holders
        upon its receipt of signed acknowledgements to this Amendment and/or the
        amendments provided to the Other Warrant Holders representing the requisite
        number of covered shares and, if Holder has not provided its signed
        acknowledgement to this Amendment by the time Issuer has obtained the written
        consent of the Majority Holders, Holder’s signature shall only be required to
        evidence its agreement that this Amendment and the other amendments referenced
        herein do not trigger the anti-dilution protection set forth in the Warrants;
        and

       

      WHEREAS,
        the Parties desire to amend the Series J Warrant to memorialize this
        understanding and to execute amendments to the Series C Warrant and the Series
        D
        Warrant (in form and substance which is substantially similar to this
        Amendment).

       

      NOW,
        THEREFORE, in consideration of the promises and covenants made herein, and
        for
        such other good and valuable consideration, the receipt and sufficiency of
        which
        are hereby acknowledged, the Parties hereby agree as follows:

       


      
        
           

        

        
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      ARTICLE
        1

      AMENDMENT

      


      1.           Amendment;
        Covenant.

       

      1.1           Amendment
        to Series J Warrant.  Effective solely for any exercise by Holder
        of up to seventy-five percent (75%) of the Series J Covered Shares
        (i.e., up to ________ shares of Issuer’s Series D-2 Convertible
        Preferred Stock) (collectively, the “Amended Warrant Price
        Shares”) occurring during the period commencing on the date hereof and
        ending on October 10, 2007 (the “Amendment Effective Period”),
        the “Warrant Price” specified in Section 9 of the Series J Warrant shall be
        $9.60 per share of such Covered Shares.  With respect to those Amended
        Warrant Price Shares that were not purchased through the exercise of the
        Series
        J Warrant during the Amendment Effective Period, immediately upon expiration
        thereof and without any further act of the Parties, the Series J Original
        Warrant Price shall be reinstated to such unpurchased Amended Warrant Price
        Shares and thereafter apply to all Series J Covered Shares and this Amendment
        shall be of no further force and effect.  Issuer hereby represents
        that, concurrently with the delivery of this Amendment to Holder, it is
        delivering to each of the Other Warrant Holders an amendment to its respective
        outstanding Series J Warrant for its consideration and acceptance, which
        amendment is identical to this Amendment in form and
        substance.  Accordingly, the Parties agree that any exercise of the
        Warrants held by the Other Warrant Holders at the prices contained herein
        shall
        not be deemed to trigger, or give rise to the triggering of, any anti-dilution
        protection contained in the Warrants.

       

      1.2           Covenant.  Issuer
        hereby covenants and agrees that, since it believes it will be able to obtain
        the funds it needs to complete the Potential Acquisition (if Issuer determines
        to proceed with such Potential Acquisition) from the exercise of Series J
        Warrants held by Holder and Other Warrant Holders, it will not enter into,
        create, incur, assume, guarantee or suffer to exist any Indebtedness (as
        defined
        in the Purchase Agreement), except as listed on Schedule 2.1(k) to the Purchase
        Agreement.

       

      ARTICLE
        2

      MISCELLANEOUS
        PROVISIONS

       

      2.           Miscellaneous
        Provisions.

       

      2.1           No
        Further Amendments.  Except as amended by this Amendment, the
        Series J Warrant remains unmodified and in full force and effect.  In
        the event of any inconsistency between the provisions of the Series J Warrant
        and the provisions of this Amendment, the provisions of this Amendment shall
        prevail.  This Amendment
        may only be modified or amended by a written agreement executed by Issuer,
        and
        consented to by Holder, with the same formalities and in the same manner
        as this
        Amendment.

       


      
        
           

        

        
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      2.2           Counterparts.  This
        Amendment may be executed in one or more counterparts, each of which shall
        be
        deemed an original but all of which when taken together shall constitute
        one and
        the same instrument.  Facsimiles or portable document files
        transmitted by e-mail containing original signatures shall be deemed for
        all
        purposes to be originally signed copies of the documents which are the subject
        of such facsimiles or files.

       

      2.3           Binding
        on Successors. This
        Amendment shall be binding upon and
        shall inure to the benefit of the successors and permitted assigns of the
        Parties.

       

      2.4           Entire
        Agreement.  The
        Series J Warrant as amended by this
        Amendment contains the entire understanding between the Parties and supersedes
        any prior written or oral agreements between them respecting the subject
        matter
        contained herein.  There are no representations, agreements,
        arrangements or understandings, oral or written, between the Parties relating
        to
        the subject matter hereof that are not fully expressed
        herein.

       

      


       

      


       

      [SIGNATURE
        PAGE TO FOLLOW]

       


      
        
           

        

        
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      IN
        WITNESS WHEREOF, the Parties hereto have executed or have caused a duly
        authorized officer to execute this Amendment all effective as of the day
        and
        year first above written.

       

      
        	
                ISSUER:

              	 	 
	 	 	 
	
                BPO
                  MANAGEMENT SERVICES, INC.,

                a
                  Delaware corporation

              	 	 
	 	 	 
	
                By:     ______________________________

                Name:
                  Patrick A. Dolan

                Its:      Chief
                  Executive Officer

              	 	 
	 	 	 
	 	 	 
	
                Amendment
                  is acknowledged and consented to:

                 

              	 	 
	
                HOLDER:

              	 	 
	 	 	 
	 	 	 
	
                By:     ______________________________

                Name:

                Its:

              	 	 


      

      


       

    

     

     

     

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