Document:

THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
      PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
      REQUIRED.

    

    SERIES
      D
      WARRANT TO PURCHASE

    

    SHARES
      OF
      COMMON STOCK

    

    OF

    

    BPO
      MANAGEMENT SERVICES, INC.

    

    Expires
      June 12, 2012

    

    
      	
              No.:
                W-D-07- __

            	
              Number
                of Shares: ___________

            

    

    Date
      of
      Issuance: June 12, 2007

    

    

    FOR
      VALUE
      RECEIVED, the undersigned, BPO Management Services, Inc., a Delaware corporation
      (together with its successors and assigns, the "Issuer"),
      hereby certifies that _______________________________ or its registered assigns
      is entitled to subscribe for and purchase, during the Term (as hereinafter
      defined), up to ____________________________________ (_____________) shares
      (subject to adjustment as hereinafter provided) of the duly authorized, validly
      issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise
      price per share equal to the Warrant Price then in effect, subject, however,
      to
      the provisions and upon the terms and conditions hereinafter set forth.
      Capitalized terms used in this Warrant and not otherwise defined herein shall
      have the respective meanings specified in Section 9 hereof.

    

    1. Term.
      The
      term of this Warrant shall commence on June 12, 2007 and shall expire at 6:00
      p.m., eastern time, on June 12, 2012 (such period being the "Term").

    

    
      	 	
              2.

            	
              Method
                of Exercise; Payment; Issuance of New Warrant; Transfer and
                Exchange.

            

    

    

    (a) Time
      of Exercise.
      The
      purchase rights represented by this Warrant may be exercised in whole or in
      part
      during the Term for such number of shares of Common Stock equal to one hundred
      percent (100%) of the number of shares of Common Stock issuable upon conversion
      of the shares of preferred stock of the Issuer that have been exercised by
      the
      Holder pursuant to the Series J Warrant granted by the Issuer to the Holder
      pursuant to the Purchase Agreement. 

    

    (b) Method
      of Exercise.
      The
      Holder hereof may exercise this Warrant, in whole or in part, by the surrender
      of this Warrant (with the exercise form attached hereto duly executed) at the
      principal office of the Issuer, and by the payment to the Issuer of an amount
      of
      consideration therefor equal to the Warrant Price in effect on the date of
      such
      exercise multiplied by the

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    number
      of
      shares of Warrant Stock with respect to which this Warrant is then being
      exercised, payable at such Holder's election (i) by certified or official bank
      check or by
      wire
      transfer to an account designated by the Issuer,
      (ii) by
      "cashless exercise" in accordance with the provisions of subsection (c) of
      this
      Section 2, but only when a registration statement under the Securities Act
      providing for the resale of the Warrant Stock is not then in effect, or (iii)
      by
      a combination of the foregoing methods of payment selected by the Holder of
      this
      Warrant.

    

    (c) Cashless
      Exercise.
      Notwithstanding any provisions herein to the contrary and commencing one and
      a
      half (1.5) years following the Original Issue Date if (i) the Per Share Market
      Value of one share of Common Stock is greater than the Warrant Price (at the
      date of calculation as set forth below) and (ii) a registration statement under
      the Securities Act providing for the resale of the Warrant Stock is not then
      in
      effect by the date such registration statement is required to be effective
      pursuant to the Registration Rights Agreement (as defined in the Purchase
      Agreement) or not effective at any time during the Effectiveness Period (as
      defined in the Registration Rights Agreement) in accordance with the terms
      of
      the Registration Rights Agreement, unless the registration statement is not
      effective as a result of the Issuer exercising its rights under Section 3(n)
      of
      the Registration Rights Agreement, in lieu of exercising this Warrant by payment
      of cash, the Holder may exercise this Warrant by a cashless exercise and shall
      receive the number of shares of Common Stock equal to an amount (as determined
      below) by surrender of this Warrant at the principal office of the Issuer
      together with the properly endorsed Notice of Exercise in which event the Issuer
      shall issue to the Holder a number of shares of Common Stock computed using
      the
      following formula:

    

    X
      = Y -
(A)(Y)

                                     
      B

    

    
      	
              Where

            	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder.

            

    

    

    
      	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable upon exercise of all
                of the
                Warrant or, if only a portion of the Warrant is being exercised,
                the
                portion of the Warrant being exercised.

            

    

    

    
      	 	
              A
                =

            	
              the
                Warrant Price. 

            

    

    

    
      	
            	B
              =	
              the
                Per Share Market Value of one share of Common
                Stock.

            

    

    

    (d) Issuance
      of Stock Certificates.
      In the
      event of any exercise of this Warrant in accordance with and subject to the
      terms and conditions hereof, certificates for the shares of Warrant Stock so
      purchased shall be dated the date of such exercise and delivered to the Holder
      hereof within a reasonable time, not exceeding three (3) Trading Days after
      such
      exercise (the “Delivery
      Date”)
      or, at
      the request of the Holder (provided that a registration statement under the
      Securities Act providing for the resale of the Warrant Stock is then in effect),
      issued and delivered to the Depository Trust Company (“DTC”)
      account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“DWAC”)
      within
      a reasonable time, not exceeding three (3) Trading Days after such exercise,
      and
      the Holder hereof shall be deemed for all purposes to be the holder of the
      shares of Warrant Stock so purchased as of the date of such exercise.
      Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
      shall only be obligated to issue and deliver the shares to the DTC on a holder’s
      behalf via DWAC if such exercise is in connection with a sale and the
      Issuer and its transfer agent are participating in DTC through the DWAC
      system.
      The
      Holder shall deliver this original Warrant, or an indemnification undertaking
      with respect to such Warrant in the case of its loss, theft or

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    destruction,
      at such time that this Warrant is fully exercised. With respect to partial
      exercises of this Warrant, the Issuer shall keep written records of the number
      of shares of Warrant Stock exercised as of each date of exercise.

    

    (e) Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Issuer fails to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Stock pursuant to an exercise on or before the Delivery
      Date, and if after such date the Holder is required by its broker to purchase
      (in an open market transaction or otherwise) shares of Common Stock to deliver
      in satisfaction of a sale by the Holder of the Warrant Stock which the Holder
      anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Issuer shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of shares of Warrant Stock that the Issuer was
      required to deliver to the Holder in connection with the exercise at issue
      times
      (B) the price at which the sell order giving rise to such purchase obligation
      was executed, and (2) at the option of the Holder, either reinstate the portion
      of the Warrant and equivalent number of shares of Warrant Stock for which such
      exercise was not honored or deliver to the Holder the number of shares of Common
      Stock that would have been issued had the Issuer timely complied with its
      exercise and delivery obligations hereunder. For example, if the Holder
      purchases Common Stock having a total purchase price of $11,000 to cover a
      Buy-In with respect to an attempted exercise of shares of Common Stock with
      an
      aggregate sale price giving rise to such purchase obligation of $10,000, under
      clause (1) of the immediately preceding sentence the Issuer shall be required
      to
      pay the Holder $1,000. The Holder shall provide the Issuer written notice
      indicating the amounts payable to the Holder in respect of the Buy-In, together
      with applicable confirmations and other evidence reasonably requested by the
      Issuer. Nothing herein shall limit a Holder’s right to pursue any other remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief with respect to the
      Issuer’s failure to timely deliver certificates representing shares of Common
      Stock upon exercise of this Warrant as required pursuant to the terms
      hereof.

     

    (f) Transferability
      of Warrant.
      Subject
      to Section 2(h) hereof, this Warrant may be transferred by a Holder, in whole
      or
      in part, without the consent of the Issuer. If transferred pursuant to this
      paragraph, this Warrant may be transferred on the books of the Issuer by the
      Holder hereof in person or by duly authorized attorney, upon surrender of this
      Warrant at the principal office of the Issuer, properly endorsed (by the Holder
      executing an assignment in the form attached hereto) and upon payment of any
      necessary transfer tax or other governmental charge imposed upon such transfer.
      This Warrant is exchangeable at the principal office of the Issuer for Warrants
      to purchase the same aggregate number of shares of Warrant Stock, each new
      Warrant to represent the right to purchase such number of shares of Warrant
      Stock as the Holder hereof shall designate at the time of such exchange. All
      Warrants issued on transfers or exchanges shall be dated the Original Issue
      Date
      and shall be identical with this Warrant except as to the number of shares
      of
      Warrant Stock issuable pursuant thereto.

    

    (g) Continuing
      Rights of Holder.
      The
      Issuer will, at the time of or at any time after each exercise of this Warrant,
      upon the request of the Holder hereof, acknowledge in writing the extent, if
      any, of its continuing obligation to afford to such Holder all rights to which
      such Holder shall continue to be entitled after such exercise in accordance
      with
      the terms of this Warrant, provided
      that if
      any such Holder shall fail to make any such request, the failure shall not
      affect the continuing obligation of the Issuer to afford such rights to such
      Holder.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (h) Compliance
      with Securities Laws.

    

    (i) The
      Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
      and
      the shares of Warrant Stock to be issued upon exercise hereof are being acquired
      solely for the Holder's own account and not as a nominee for any other party,
      and for investment, and that the Holder will not offer, sell or otherwise
      dispose of this Warrant or any shares of Warrant Stock to be issued upon
      exercise hereof except pursuant to an effective registration statement, or
      an
      exemption from registration, under the Securities Act and any applicable state
      securities laws.

    

    (ii) Except
      as
      provided in paragraph (iii) below, this Warrant and all certificates
      representing shares of Warrant Stock issued upon exercise hereof shall be
      stamped or imprinted with a legend in substantially the following
      form:

    

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
      PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

    

    (iii) The
      Issuer agrees to reissue this Warrant or certificates representing any of the
      Warrant Stock, without the legend set forth above if at such time, prior to
      making any transfer of any such securities, the Holder shall give written notice
      to the Issuer describing the manner and terms of such transfer. Such proposed
      transfer will not be effected until: (a) either (i) the Issuer has received
      an
      opinion of counsel reasonably satisfactory to the Issuer, to the effect that
      the
      registration of such securities under the Securities Act is not required in
      connection with such proposed transfer, (ii) a registration statement under
      the
      Securities Act covering such proposed disposition has been filed by the Issuer
      with the Securities and Exchange Commission and has become effective under
      the
      Securities Act and the Holder has represented that the Warrant Stock has been
      or
      will be sold, (iii) the Issuer has received other evidence reasonably
      satisfactory to the Issuer that such registration and qualification under the
      Securities Act and state securities laws are not required, or (iv) the Holder
      provides the Issuer with reasonable assurances that such security can be sold
      pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer
      has
      received an opinion of counsel reasonably satisfactory to the Issuer, to the
      effect that registration or qualification under the securities or "blue sky"
      laws of any state is not required in connection with such proposed disposition,
      or (ii) compliance with applicable state securities or "blue sky" laws has
      been
      effected or a valid exemption exists with respect thereto. The Issuer will
      respond to any such notice from a holder within five (5) Trading Days. In the
      case of any proposed transfer under this Section 2(h), the Issuer will use
      reasonable efforts to comply with any such applicable state securities or "blue
      sky" laws, but shall in no event be required, (x) to qualify to do business
      in
      any state where it is not then qualified, (y) to take any action that
      would

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    subject
      it to tax or to the general service of process in any state where it is not
      then
      subject, or (z) to comply with state securities or “blue sky” laws of any state
      for which registration by coordination is unavailable to the Issuer. The
      restrictions on transfer contained in this Section 2(h) shall be in addition
      to,
      and not by way of limitation of, any other restrictions on transfer contained
      in
      any other section of this Warrant. Whenever
      a
      certificate representing the Warrant Stock is required to be issued to a the
      Holder without a legend, in lieu of delivering physical certificates
      representing the Warrant Stock, the Issuer shall use its reasonable best efforts
      to cause its transfer agent to electronically transmit the Warrant Stock to
      the
      Holder by crediting the account of the Holder's Prime Broker with DTC through
      its DWAC system (to the extent not inconsistent with any provisions of this
      Warrant or the Purchase Agreement).
      Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
      shall only be obligated to issue and deliver the shares to the DTC on a holder’s
      behalf via DWAC if such exercise is in connection with a sale and the
      Issuer and its transfer agent are participating in DTC through the DWAC
      system.
      

    

    (i) Accredited
      Investor Status.
      In no
      event may the Holder exercise this Warrant in whole or in part unless the Holder
      is then an “accredited investor” as defined in Regulation D under the Securities
      Act. 

    

    3. Stock
      Fully Paid; Reservation and Listing of Shares; Covenants.

    

    (a) Stock
      Fully Paid.
      The
      Issuer represents, warrants, covenants and agrees that all shares of Warrant
      Stock which may be issued upon the exercise of this Warrant or otherwise
      hereunder will, when issued in accordance with the terms of this Warrant, be
      duly authorized, validly issued, fully paid and nonassessable and free from
      all
      taxes, liens and charges created by or through the Issuer. The Issuer further
      covenants and agrees that during the period within which this Warrant may be
      exercised, the Issuer will at all times have authorized and reserved for the
      purpose of issuance upon exercise of this Warrant a number of shares of Common
      Stock equal to at least one hundred twenty percent (120%) of the aggregate
      number of shares of Common Stock issuable upon exercise of this
      Warrant.

    

    (b) Reservation.
      If any
      shares of Common Stock required to be reserved for issuance upon exercise of
      this Warrant or as otherwise provided hereunder require registration or
      qualification with any governmental authority under any federal or state law
      before such shares may be so issued, the Issuer will in good faith use its
      best
      efforts as expeditiously as possible at its expense to cause such shares to
      be
      duly registered or qualified. If the Issuer shall list any shares of Common
      Stock on any securities exchange or market it will, at its expense, list
      thereon, maintain and increase when necessary such listing, of, all shares
      of
      Warrant Stock from time to time issued upon exercise of this Warrant or as
      otherwise provided hereunder (provided that such Warrant Stock has been
      registered pursuant to a registration statement under the Securities Act then
      in
      effect), and, to the extent permissible under the applicable securities exchange
      rules, all unissued shares of Warrant Stock which are at any time issuable
      hereunder, so long as any shares of Common Stock shall be so listed. The Issuer
      will also so list on each securities exchange or market, and will maintain
      such
      listing of, any other securities which the Holder of this Warrant shall be
      entitled to receive upon the exercise of this Warrant if at the time any
      securities of the same class shall be listed on such securities exchange or
      market by the Issuer.

    

    (c) Covenants.
      The
      Issuer shall not by any action including, without limitation, amending the
      Certificate of Incorporation or the by-laws of the Issuer, or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    any
      other
      action, avoid or seek to avoid the observance or performance of any of the
      terms
      of this Warrant, but will at all times in good faith assist in the carrying
      out
      of all such terms and in the taking of all such actions as may be necessary
      or
      appropriate to protect the rights of the Holder hereof against dilution (to
      the
      extent specifically provided herein) or impairment. Without limiting the
      generality of the foregoing, the Issuer will (i) not permit the par value,
      if
      any, of its Common Stock to exceed the then effective Warrant Price, (ii) not
      amend or modify any provision of the Certificate of Incorporation or by-laws
      of
      the Issuer in any manner that would adversely affect the rights of the Holders
      of the Warrants, (iii) take all such action as may be reasonably necessary
      in
      order that the Issuer may validly and legally issue fully paid and nonassessable
      shares of Common Stock, free and clear of any liens, claims, encumbrances and
      restrictions (other than as provided herein) upon the exercise of this Warrant,
      and (iv) use its best efforts to obtain all such authorizations, exemptions
      or
      consents from any public regulatory body having jurisdiction thereof as may
      be
      reasonably necessary to enable the Issuer to perform its obligations under
      this
      Warrant.

    

    (d) Loss,
      Theft, Destruction of Warrants.
      Upon
      receipt of evidence satisfactory to the Issuer of the ownership of and the
      loss,
      theft, destruction or mutilation of any Warrant and, in the case of any such
      loss, theft or destruction, upon receipt of indemnity or security satisfactory
      to the Issuer or, in the case of any such mutilation, upon surrender and
      cancellation of such Warrant, the Issuer 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 number of shares of Common
      Stock.

    

    4. Adjustment
      of Warrant Price and Number of Shares Issuable Upon Exercise.
      The
      Warrant Price and the Warrant Share Number shall be subject to adjustment from
      time to time as set forth in this Section 4. The Issuer shall give the Holder
      notice of any event described below which requires an adjustment pursuant to
      this Section 4 in accordance with the notice provisions set forth in Section
      5.

    

    (a) Recapitalization,
      Reorganization, Reclassification, Consolidation, Merger or Sale.

     

    (i)
      In
      case the Issuer after the Original Issue Date shall do any of the following
      (each, a "Triggering
      Event"):
      (a)
      consolidate or merge with or into any other Person and the Issuer shall not
      be
      the continuing or surviving corporation of such consolidation or merger, or
      (b)
      permit any other Person to consolidate with or merge into the Issuer and the
      Issuer shall be the continuing or surviving Person but, in connection with
      such
      consolidation or merger, any Capital Stock of the Issuer shall be changed into
      or exchanged for Securities of any other Person or cash or any other property,
      or (c) transfer all or substantially all of its properties or assets to any
      other Person, or (d) effect a capital reorganization or reclassification of
      its
      Capital Stock, then, and in the case of each such Triggering Event, proper
      provision shall be made to the Warrant Price and the number of shares of Warrant
      Stock that may be purchased upon exercise of this Warrant so that, upon the
      basis and the terms and in the manner provided in this Warrant, the Holder
      of
      this Warrant shall be entitled upon the exercise hereof at any time after the
      consummation of such Triggering Event, to the extent this Warrant is not
      exercised prior to such Triggering Event, to receive at the Warrant Price as
      adjusted to take into account the consummation of such Triggering Event, in
      lieu
      of the Common Stock issuable upon such exercise of this Warrant prior to such
      Triggering Event, the Securities, cash and property to which such Holder would
      have been entitled upon the consummation of such Triggering Event if such Holder
      had exercised the rights represented by this Warrant immediately prior thereto
      (including the right of a stockholder to elect the type of

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    consideration
      it will receive upon a Triggering Event), subject to adjustments (subsequent
      to
      such corporate action) as nearly equivalent as possible to the adjustments
      provided for elsewhere in this Section 4, and the Warrant Price shall be
      adjusted to equal the product of (A) the closing price of the common stock
      of
      the continuing or surviving corporation as a result of such Triggering Event
      as
      of the date immediately preceding the date of the consummation of such
      Triggering Event multiplied by (B) the quotient of (i) the Warrant Price divided
      by (ii) the Per Share Market Value of the Common Stock as of the date
      immediately preceding the Original Issue Date. Immediately upon the occurrence
      of a Triggering Event, the Issuer shall notify the Holder in writing of such
      Triggering Event and provide the calculations in determining the number of
      shares of Warrant Stock issuable upon exercise of the new warrant and the
      adjusted Warrant Price. Upon the Holder’s request, the continuing or surviving
      corporation as a result of such Triggering Event shall issue to the Holder
      a new
      warrant of like tenor evidencing the right to purchase the adjusted number
      of
      shares of Warrant Stock and the adjusted Warrant Price pursuant to the terms
      and
      provisions of this Section 4(a)(i). Notwithstanding the foregoing to the
      contrary, this Section 4(a)(i) shall only apply if the surviving entity pursuant
      to any such Triggering Event is a company that has a class of equity securities
      registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board. In the event that the
      surviving entity pursuant to any such Triggering Event is not a public company
      that is
      registered pursuant to the Securities Exchange Act of 1934, as amended, or
      its
      common stock is not listed or quoted on a national securities exchange, national
      automated quotation system or the OTC Bulletin Board, then the Holder shall
      have
      the right to demand that the Issuer pay to the Holder an amount in cash equal
      to
      the value of this Warrant as of the date of the Triggering Event calculated
      in
      accordance with the Black-Scholes formula.

    

    (ii) In
      the
      event that the Holder has elected not to exercise this Warrant prior to the
      consummation of a Triggering Event, so long as the surviving entity pursuant
      to
      any Triggering Event is a company that has a class of equity securities
registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board,
      the
      surviving entity and/or each Person (other than the Issuer) which may be
      required to deliver any Securities, cash or property upon the exercise of this
      Warrant as provided herein shall assume, by written instrument delivered to,
      and
      reasonably satisfactory to, the Holder of this Warrant, (A) the obligations
      of
      the Issuer under this Warrant (and if the Issuer shall survive the consummation
      of such Triggering Event, such assumption shall be in addition to, and shall
      not
      release the Issuer from, any continuing obligations of the Issuer under this
      Warrant) and (B) the obligation to deliver to such Holder such Securities,
      cash
      or property as, in accordance with the foregoing provisions of this subsection
      (a), such Holder shall be entitled to receive, and the surviving entity and/or
      each such Person shall have similarly delivered to such Holder an opinion of
      counsel for the surviving entity and/or each such Person, which counsel shall
      be
      reasonably satisfactory to such Holder, or in the alternative, a written
      acknowledgement executed by the President or Chief Financial Officer of the
      Issuer, stating that this Warrant shall thereafter continue in full force and
      effect and the terms hereof (including, without limitation, all of the
      provisions of this subsection (a)) shall be applicable to the Securities, cash
      or property which the surviving entity and/or each such Person may be required
      to deliver upon any exercise of this Warrant or the exercise of any rights
      pursuant hereto. 

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    (b) Stock
      Dividends, Subdivisions and Combinations.
      If at
      any time the Issuer shall:

    

       (i) make
      or
      issue or set a record date for the holders of the Common Stock for the purpose
      of entitling them to receive a dividend payable in, or other distribution of,
      shares of Common Stock, 

    

       (ii)
       subdivide
      its outstanding shares of Common Stock into a larger number of shares of Common
      Stock, or

    

       (iii)
       combine
      its outstanding shares of Common Stock into a smaller number of shares of Common
      Stock,

    

    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately after the occurrence of any such event shall be adjusted to equal
      the number of shares of Common Stock which a record holder of the same number
      of
      shares of Common Stock for which this Warrant is exercisable immediately prior
      to the occurrence of such event would own or be entitled to receive after the
      happening of such event, and (2) the Warrant Price then in effect shall be
      adjusted to equal (A) the Warrant Price then in effect multiplied by the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the adjustment divided by (B) the number of shares of Common Stock
      for
      which this Warrant is exercisable immediately after such
      adjustment.

    

    (c) Certain
      Other Distributions.
      If at
      any time the Issuer shall make or issue or set a record date for the holders
      of
      the Common Stock for the purpose of entitling them to receive any divi-dend
      or
      other distribution of:

    

    (i) cash
      (other than a cash dividend payable out of earnings or earned surplus legally
      available for the payment of dividends under the laws of the jurisdiction of
      incorporation of the Issuer),

    

    (ii) any
      evidences of its indebtedness, any shares of stock of any class or any other
      securities or property of any nature whatsoever (other than cash, Common Stock
      Equivalents or Additional Shares of Common Stock), or

    

    (iii) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of stock of any class or any other securities or
      property of any nature whatsoever (other than cash, Common Stock Equivalents
      or
      Additional Shares of Common Stock), 

    

    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      shall
      be adjusted to equal the product of the number of shares of Common Stock for
      which this Warrant is exercisable immediately prior to such adjustment
      multiplied by a fraction (A) the numerator of which shall be the Per Share
      Market Value of Common Stock at the date of taking such record and (B) the
      denominator of which shall be such Per Share Market Value minus the amount
      allocable to one share of Common Stock of any such cash so distributable and
      of
      the fair value (as determined in good faith by the Board and supported by an
      opinion from an investment banking firm mutually agreed upon by the Issuer
      and
      the Holder) of any and all such evidences of indebtedness, shares of stock,
      other securities or property or warrants or other subscription or purchase
      rights so distributable, and (2) the Warrant Price then in effect shall be
      adjusted to equal (A) the Warrant Price then in effect multiplied by the number
      of shares of Common Stock

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    for
      which
      this Warrant is exercisable immediately prior to the adjustment divided by
      (B)
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately after such adjustment. A reclassification of the Common Stock (other
      than a change in par value, or from par value to no par value or from no par
      value to par value) into shares of Common Stock and shares of any other class
      of
      stock shall be deemed a distribution by the Issuer to the holders of its Common
      Stock of such shares of such other class of stock within the meaning of this
      Section 4(c) and, if the outstanding shares of Common Stock shall be changed
      into a larger or smaller number of shares of Common Stock as a part of such
      reclassification, such change shall be deemed a subdivision or combination,
      as
      the case may be, of the outstanding shares of Common Stock within the meaning
      of
      Section 4(b). 

    

    (d) Issuance
      of Additional Shares of Common Stock.
      

    

    (i) Commencing
      on the Original Issue Date and for a period of one (1) year thereafter, in
      the
      event the Issuer shall issue any Additional Shares of Common Stock (otherwise
      than as provided in the foregoing subsections (b) through (c) of this Section
      4), at a price per share less than the Warrant Price then in effect or without
      consideration, then the Warrant Price upon each such issuance shall be adjusted
      to the price equal to the consideration per share paid for such Additional
      Shares of Common Stock.

    

    (ii) Commencing
      on the date that is one (1) year and one (1) day following the Original Issue
      Date, in the event the Issuer shall issue any Additional Shares of Common Stock
      (otherwise than as provided in the foregoing subsections (a) through (c) of
      this
      Section 4), at a price per share less than the Warrant Price then in effect
      or
      without consideration, then the Warrant Price upon each such issuance shall
      be
      adjusted to that price determined by multiplying the Warrant Price then in
      effect by a fraction:

     

    (A) the
      numerator of which shall be equal to the sum of (x) the number of shares of
      Outstanding Common Stock immediately prior to the issuance of such Additional
      Shares of Common Stock plus
      (y) the
      number of shares of Common Stock (rounded to the nearest whole share) which
      the
      aggregate consideration for the total number of such Additional Shares of Common
      Stock so issued would purchase at a price per share equal to the Warrant Price
      then in effect, and

     

    (B) the
      denominator of which shall be equal to the number of shares of Outstanding
      Common Stock immediately after the issuance of such Additional Shares of Common
      Stock.

    

    (iii) No
      adjustment of the number of shares of Common Stock for which this Warrant shall
      be exercisable shall be made under paragraphs (i) and (ii) of Section 4(d)
      upon
      the issuance of any Additional Shares of Common Stock which are issued pursuant
      to the exercise of any Common Stock Equivalents, if any such adjustment shall
      previously have been made upon the issuance of such Common Stock Equivalents
      (or
      upon the issuance of any warrant or other rights therefor) pursuant to Section
      4(e).

    

    (e)  Issuance
      of Common Stock Equivalents.
      If at
      any time the Issuer shall take a record of the holders of its Common Stock
      for
      the purpose of entitling them to receive a distribution of, or shall in any
      manner (whether directly or by assumption in a merger in which the Issuer is
      the
      surviving corporation) issue or sell, any Common Stock Equivalents, whether
      or
      not the rights to exchange or convert thereunder are immediately exercisable,
      and the price per share for which Common Stock is issuable upon such conversion
      or exchange shall be less than

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    the
      Warrant Price in effect immediately prior to the time of such issue or sale,
      or
      if, after any such issuance of Common Stock Equivalents, the price per share
      for
      which Additional Shares of Common Stock may be issuable thereafter is amended
      or
      adjusted, and such price as so amended shall be less than the Warrant Price
      in
      effect at the time of such amendment or adjustment, then the Warrant Price
      then
      in effect shall be adjusted as provided in Section 4(d). No further adjustments
      of the number of shares of Common Stock for which this Warrant is exercisable
      and the Warrant Price then in effect shall be made upon the actual issue of
      such
      Common Stock upon conversion or exchange of such Common Stock
      Equivalents.

    

    (f) Superseding
      Adjustment.
      If, at
      any time after any adjustment of the number of shares of Common Stock for which
      this Warrant is exercisable and the Warrant Price then in effect shall have
      been
      made pursuant to Section 4(e) as the result of any issuance of Common Stock
      Equivalents, and (i) such Common Stock Equivalents, or the right of conversion
      or exchange in such Common Stock Equivalents, shall expire, and all or a portion
      of such or the right of conversion or exchange with respect to all or a portion
      of such Common Stock Equivalents, as the case may be, shall not have been
      exercised, or (ii) the consideration per share for which shares of Common Stock
      are issuable pursuant to such Common Stock Equivalents shall be increased,
      then
      such previous adjustment shall be rescinded and annulled and the Additional
      Shares of Common Stock which were deemed to have been issued by virtue of the
      computation made in connection with the adjustment so rescinded and annulled
      shall no longer be deemed to have been issued by virtue of such computation.
      Upon the occurrence of an event set forth in this Section 4(f), there shall
      be a
      recomputation made of the effect of such Common Stock Equivalents on the basis
      of: (i) treating the number of Additional Shares of Common Stock theretofore
      actually issued or issuable pursuant to the previous exercise of Common Stock
      Equivalents or any such right of conversion or exchange, as having been issued
      on the date or dates of any such exercise and for the consideration actually
      received and receivable therefor, and (ii) treating any such Common Stock
      Equivalents which then remain outstanding as having been granted or issued
      immediately after the time of such increase of the consideration per share
      for
      which Additional Shares of Common Stock are issuable under such Common Stock
      Equivalents; whereupon a new ad-justment of the number of shares of Common
      Stock
      for which this Warrant is exercisable and the Warrant Price then in effect
      shall
      be made, which new adjustment shall supersede the previous adjustment so
      rescinded and annulled.

    

    (g) Other
      Provisions applicable to Adjustments under this Section.
      The
      following provisions shall be ap-plicable to the making of adjustments of the
      number of shares of Common Stock for which this Warrant is exercisable and
      the
      Warrant Price then in effect provided for in this Section 4:

    

    (i) Computation
      of Consideration.
      To the
      extent that any Additional Shares of Common Stock or any Common Stock
      Equivalents (or any warrants or other rights therefor) shall be issued for
      cash
      consideration, the consideration received by the Issuer therefor shall be the
      amount of the cash received by the Issuer therefor, or, if such Additional
      Shares of Common Stock or Common Stock Equivalents are offered by the Issuer
      for
      subscription, the subscription price, or, if such Additional Shares of Common
      Stock or Common Stock Equivalents are sold to underwriters or dealers for public
      offering without a subscription offering, the initial public offering price
      (in
      any such case subtracting any amounts paid or receivable for accrued interest
      or
      accrued dividends and without taking into account any compensation, discounts
      or
      expenses paid or incurred by the Issuer for and in the underwriting of, or
      otherwise in connection with, the issuance thereof). In connection with any
      merger or consolidation in which the Issuer is the surviving corporation (other
      than any consolidation or merger in which the previously outstanding shares
      of
      Common Stock of the Issuer shall be changed to or exchanged for the
      stock

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    or
      other
      securities of another corporation), the amount of consideration therefor shall
      be deemed to be the fair value, as determined reasonably and in good faith
      by
      the Board, of such portion of the assets and business of the nonsurviving
      corporation as the Board may determine to be attributable to such shares of
      Common Stock or Common Stock Equivalents, as the case may be. The consideration
      for any Additional Shares of Common Stock issuable pursuant to any warrants
      or
      other rights to subscribe for or purchase the same shall be the consideration
      received by the Issuer for issuing such warrants or other rights plus the
      additional con-sideration payable to the Issuer upon exercise of such warrants
      or other rights. The consideration for any Additional Shares of Common Stock
      issuable pursuant to the terms of any Common Stock Equivalents shall be the
      consideration received by the Issuer for issuing war-rants or other rights
      to
      subscribe for or purchase such Common Stock Equivalents, plus the consideration
      paid or payable to the Issuer in respect of the subscription for or purchase
      of
      such Common Stock Equivalents, plus the additional consideration, if any,
      payable to the Issuer upon the exercise of the right of conversion or exchange
      in such Common Stock Equivalents. In the event of any consolidation or merger
      of
      the Issuer in which the Issuer is not the surviving corporation or in which
      the
      previously outstanding shares of Common Stock of the Issuer shall be changed
      into or exchanged for the stock or other securities of another corporation,
      or
      in the event of any sale of all or substantially all of the assets of the Issuer
      for stock or other securities of any corporation, the Issuer shall be deemed
      to
      have issued a number of shares of its Common Stock for stock or securities
      or
      other property of the other corporation computed on the basis of the actual
      exchange ratio on which the transaction was predicated, and for a consideration
      equal to the fair market value on the date of such transaction of all such
      stock
      or securities or other property of the other corporation. In the event any
      consideration received by the Issuer for any securities consists of property
      other than cash, the fair market value thereof at the time of issuance or as
      otherwise applicable shall be as determined in good faith by the Board. In
      the
      event Common Stock is issued with other shares or securities or other assets
      of
      the Issuer for consideration which covers both, the consideration computed
      as
      provided in this Section 4(h)(i) shall be allocated among such securities and
      assets as determined in good faith by the Board.

    

    (ii) When
      Adjustments to Be Made.
      The
      adjustments required by this Section 4 shall be made whenever and as often
      as
      any specified event requiring an adjustment shall occur, except that any
      adjustment of the number of shares of Common Stock for which this Warrant is
      exercisable that would otherwise be required may be postponed (except in the
      case of a subdivision or combination of shares of the Common Stock, as provided
      for in Section 4(b)) up to, but not beyond the date of exercise if such
      adjustment either by itself or with other adjustments not previously made adds
      or subtracts less than one percent (1%) of the shares of Common Stock for which
      this Warrant is exercisable immediately prior to the making of such adjustment.
      Any adjustment representing a change of less than such minimum amount (except
      as
      aforesaid) which is postponed shall be carried forward and made(x) as soon
      as
      such adjustment, together with other adjustments required by this Section 4
      and
      not previously made, would result in a minimum adjustment or (y) on the date
      of
      exercise. For the purpose of any adjustment, any specified event shall be deemed
      to have occurred at the close of business on the date of its
      occurrence.

    

    (iii) Fractional
      Interests.
      In
      computing ad-justments under this Section 4, fractional interests in Common
      Stock shall be taken into account to the near-est one one-hundredth
      (1/100th)
      of a
      share.

    

    (iv) When
      Adjustment Not Required.
      If the
      Issuer shall take a record of the holders of its Common Stock for the purpose
      of
      entitling them to receive a dividend or distribution or subscription or purchase
      rights and shall, thereafter and before the distribution to

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    stockholders
      thereof, legally abandon its plan to pay or deliver such dividend, distribution,
      subscription or purchase rights, then thereafter no adjustment shall be required
      by reason of the taking of such record and any such adjustment previously made
      in respect thereof shall be rescinded and annulled.

     

    (h) Form
      of Warrant after Adjustments.
      The
      form of this Warrant need not be changed because of any adjustments in the
      Warrant Price or the number and kind of Securities purchasable upon the exercise
      of this Warrant.

    

    (i) Escrow
      of Warrant Stock.
      If
      after any property becomes distributable pursuant to this Section 4 by reason
      of
      the taking of any record of the holders of Common Stock, but prior to the
      occurrence of the event for which such record is taken, and the Holder
      exer-cises this Warrant, any shares of Common Stock issuable upon exercise
      by
      reason of such adjustment shall be deemed the last shares of Common Stock for
      which this Warrant is exercised (notwithstanding any other provision to the
      contrary herein) and such shares or other property shall be held in escrow
      for
      the Holder by the Issuer to be issued to the Holder upon and to the extent
      that
      the event actually takes place, upon payment of the current Warrant Price.
      Notwithstanding any other provision to the contrary herein, if the event for
      which such record was taken fails to occur or is rescinded, then such escrowed
      shares shall be cancelled by the Issuer and escrowed property
      returned.

    

    (j) Acquisition
      Failure Redemption In the event of an Acquisition Failure Redemption (as defined
      in the Certificate of Designation) by the Holder, a percentage of the number
      of
      Warrants initially issued to the Holder under the Purchase Agreement equal to
      the Acquisition Failure Percentage (as defined below) shall automatically
      terminate and shall be returned to the Issuer by the Holder within five (5)
      business days of the Holder’s receipt of the Acquisition Failure Redemption
      Price (as defined in the Certificate of Designation). For purposes hereof,
      the
“Acquisition Failure Percentage” shall mean the quotient of (i) the number of
      shares of the Issuer's Series D Convertible Preferred Stock (the "Preferred
      Stock") that are redeemed by the Issuer in a completed Acquisition Failure
      Redemption (as defined in the Certificate of Designation) and (ii) the number
      of
      shares of Preferred Stock initially purchased by the Holder under the Purchase
      Agreement, and the “Acquisition Failure Amount” shall mean the difference of the
      initial amount of the Acquisition Funds (as defined in the Purchase Agreement)
      and the amount of Acquisition Funds that the Issuer has paid directly to
      Approved Acquisition Targets (as defined in the Purchase Agreement) for those
      Acquisitions (as defined in the Purchase Agreement) that have been completed,
      consummated and closed, if any.

    

    5. Notice
      of Adjustments.
      Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant
      to
      Section 4 hereof (for purposes of this Section 5, each an "adjustment"),
      the
      Issuer shall cause its Chief Financial Officer to prepare and execute a
      certificate setting forth, in reasonable detail, the event requiring the
      adjustment, the amount of the adjustment, the method by which such adjustment
      was calculated (including a description of the basis on which the Board made
      any
      determination hereunder), and the Warrant Price and Warrant Share Number after
      giving effect to such adjustment, and shall cause copies of such certificate
      to
      be delivered to the Holder of this Warrant promptly after each adjustment.
      Any
      dispute between the Issuer and the Holder of this Warrant with respect to the
      matters set forth in such certificate may at the option of the Holder of this
      Warrant be submitted to a national or regional accounting firm reasonably
      acceptable to the Issuer and the Holder, provided
      that the
      Issuer shall have ten (10) days after receipt of notice from such Holder of
      its
      selection of such firm to object thereto, in which case such Holder shall select
      another such firm and the Issuer shall have no such right of objection. The
      firm
      selected by the Holder of this Warrant as

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    provided
      in the preceding sentence shall be instructed to deliver a written opinion
      as to
      such matters to the Issuer and such Holder within thirty (30) days after
      submission to it of such dispute. Such opinion shall be final and binding on
      the
      parties hereto. The costs and expenses of the initial accounting firm shall
      be
      paid equally by the Issuer and the Holder and, in the case of an objection
      by
      the Issuer, the costs and expenses of the subsequent accounting firm shall
      be
      paid in full by the Issuer.

    

    6. Fractional
      Shares.
      No
      fractional shares of Warrant Stock will be issued in connection with any
      exercise hereof, but in lieu of such fractional shares, the Issuer shall round
      the number of shares to be issued upon exercise up to the nearest whole number
      of shares.

    

    7. Ownership
      Cap and Exercise Restriction.
      Notwithstanding anything to the contrary set forth in this Warrant, at no time
      may a Holder of this Warrant exercise this Warrant if the number of shares
      of
      Common Stock to be issued pursuant to such exercise would exceed, when
      aggregated with all other shares of Common Stock owned by such Holder at such
      time, the number of shares of Common Stock which would result in such Holder
      beneficially owning (as determined in accordance with Section 13(d) of the
      Exchange Act and the rules thereunder) in excess of 9.99% of the then issued
      and
      outstanding shares of Common Stock; provided,
      however,
      that
      upon a holder of this Warrant providing the Issuer with sixty-one (61) days
      notice (pursuant to Section 13 hereof) (the "Waiver
      Notice")
      that
      such Holder would like to waive this Section 7 with regard to any or all shares
      of Common Stock issuable upon exercise of this Warrant, this Section 7 will
      be
      of no force or effect with regard to all or a portion of the Warrant referenced
      in the Waiver Notice; provided,
      further,
      that
      this provision shall be of no further force or effect during the sixty-one
      (61)
      days immediately preceding the expiration of the term of this Warrant.
      Notwithstanding the foregoing, these exercise restrictions shall not be
      applicable to Renaissance Capital Group, Inc. and its affiliates (collectively,
      "Renn"),
      if
      Renn so notifies the Issuer (either in writing or by email) prior to the date
      of
      issuance of the securities to which this paragraph is applicable.

    

    8.  Registration
      Rights.
      The
      Holder of this Warrant is entitled to the benefit of certain registration rights
      with respect to the shares of Warrant Stock issuable upon the exercise of this
      Warrant pursuant to that certain Registration Rights Agreement, of even date
      herewith, by and among the Issuer and Persons listed on Schedule I thereto
      (the
“Registration
      Rights Agreement”)
      and
      the registration rights with respect to the shares of Warrant Stock issuable
      upon the exercise of this Warrant by any subsequent Holder may only be assigned
      in accordance with the terms and provisions of the Registrations Rights
      Agreement.

    

    9. Definitions.
      For the
      purposes of this Warrant, the following terms have the following
      meanings:

    

    "Additional
      Shares of Common Stock"
      means
      all shares of Common Stock issued by the Issuer after the Original Issue Date,
      and all shares of Other Common, if any, issued by the Issuer after the Original
      Issue Date, except: (i) securities issued (other than for cash) in connection
      with a merger, acquisition, or consolidation, (ii) securities issued pursuant
      to
      the conversion or exercise of convertible or exercisable securities issued
      or
      outstanding on or prior to the date of the Purchase Agreement or issued pursuant
      to the Purchase Agreement (so long as the conversion or exercise price in such
      securities are not amended to lower such price and/or adversely affect the
      Holders), (iii) the Warrant Stock, (iv) securities issued in connection with
      bona fide strategic license agreements or other partnering arrangements so
      long
      as such issuances are not for the purpose of raising capital, (v) Common Stock
      issued or the issuance or grants of options to purchase

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    Common
      Stock pursuant to the Issuer’s stock option plans and employee stock purchase
      plans that either (x) exist on the date of the Purchase Agreement and are duly
      approved by the Board or (y) are permitted under Section 9.15 of the Purchase
      Agreement, (vi) Common Stock issued as payment of dividends on the Series D
      Convertible Preferred Stock issued pursuant to the Purchase Agreement, and
      (vii)
      any warrants issued to the placement agent and its designees for the
      transactions contemplated by the Purchase Agreement.

    

    “Board"
      shall
      mean the Board of Directors of the Issuer.

    

    "Capital
      Stock"
      means
      and includes (i) any and all shares, interests, participations or other
      equivalents of or interests in (however designated) corporate stock, including,
      without limitation, shares of preferred or preference stock, (ii) all
      partnership interests (whether general or limited) in any Person which is a
      partnership, (iii) all membership interests or limited liability company
      interests in any limited liability company, and (iv) all equity or ownership
      interests in any Person of any other type.

    

    "Certificate
      of Designation"
      means
      the Certificate of Designation of the Relative Rights and Preferences of the
      Series D Convertible Preferred Stock of the Issuer as in effect on the Original
      Issue Date, and as hereafter from time to time amended, modified, supplemented
      or restated in accordance with the terms hereof and thereof and pursuant to
      applicable law.

    

    "Certificate
      of Incorporation"
      means
      the Certificate of Incorporation of the Issuer as in effect on the Original
      Issue Date, and as hereafter from time to time amended, modified, supplemented
      or restated in accordance with the terms hereof and thereof and pursuant to
      applicable law.

    

    "Common
      Stock"
      means
      the Common Stock, $0.01 par value per share, of the Issuer and any other Capital
      Stock into which such stock may hereafter be changed.

    

    "Common
      Stock Equivalent"
      means
      any Convertible Security or warrant, option or other right to subscribe for
      or
      purchase any Additional Shares of Common Stock or any Convertible
      Security.

    

    "Convertible
      Securities"
      means
      evidences of Indebtedness, shares of Capital Stock or other Securities which
      are
      or may be at any time convertible into or exchangeable for Additional Shares
      of
      Common Stock. The term "Convertible Security" means one of the Convertible
      Securities.

    

    "Governmental
      Authority"
      means
      any governmental, regulatory or self-regulatory entity, department, body,
      official, authority, commission, board, agency or instrumentality, whether
      federal, state or local, and whether domestic or foreign.

    

    "Holders"
      mean
      the Persons who shall from time to time own any Warrant. The term "Holder"
      means
      one of the Holders.

    

    "Independent
      Appraiser"
      means a
      nationally recognized or major regional investment banking firm or firm of
      independent certified public accountants of recognized standing (which may
      be
      the firm that regularly examines the financial statements of the Issuer) that
      is
      regularly engaged in the business of appraising the Capital
      Stock or assets of corporations or other entities as going concerns, and which
      is not affiliated with either the Issuer or the Holder of any
      Warrant.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    

    "Issuer"
      means
      BPO Management Services, Inc., a Delaware corporation, and its successors.
      

    

    "Majority
      Holders"
      means
      at any time the Holders of Warrants exercisable for a majority of the shares
      of
      Warrant Stock issuable under the then-outstanding Warrants.

    

    "Original
      Issue Date"
      means
      June 12, 2007.

    

    "OTC
      Bulletin Board"
      means
      the over-the-counter electronic bulletin board.

    

    "Other
      Common"
      means
      any other Capital Stock of the Issuer of any class which shall be authorized
      at
      any time after the date of this Warrant (other than Common Stock) and which
      shall have the right to participate in the distribution of earnings and assets
      of the Issuer without limitation as to amount.

    

    “Outstanding
      Common Stock”
means,
      at any given time, the aggregate amount of outstanding shares of Common Stock,
      assuming full exercise, conversion or exchange (as applicable) of all options,
      warrants and other Securities which are convertible into or exercisable or
      exchangeable for, and any right to subscribe for, shares of Common Stock that
      are outstanding at such time.

    

    "Person"
      means
      an individual, corporation, limited liability company, partnership, joint stock
      company, trust, unincorporated organization, joint venture, Governmental
      Authority or other entity of whatever nature.

    

    "Per
      Share Market Value"
      means
      on any particular date (a) the last closing bid price per share of the Common
      Stock on such date on the OTC
      Bulletin Board or
      a
      registered national stock exchange on which the Common Stock is then listed,
      or
      if there is no such price on such date, then the closing bid price on such
      exchange or quotation system on the date nearest preceding such date, or (b)
      if
      the Common Stock is not quoted or listed then on the OTC Bulletin Board or
      any
      registered national stock exchange, the last closing bid price for a share
      of
      Common Stock in the over-the-counter market, as reported by the OTC Bulletin
      Board or in Pink Sheets, LLC or similar organization or agency succeeding to
      its
      functions of reporting prices) at the close of business on such date, or (c)
      if
      the Common Stock is not then reported by the OTC Bulletin Board or Pink Sheets,
      LLC (or similar organization or agency succeeding to its functions of reporting
      prices), then the average of the "Pink Sheet" quotes for the applicable Trading
      Days preceding such date of determination, or (d) if the Common Stock is not
      then publicly traded the fair market value of a share of Common Stock as
      determined by an Independent Appraiser selected in good faith by the Majority
      Holders; provided,
      however,
      that
      the Issuer, after receipt of the determination by such Independent Appraiser,
      shall have the right to select an additional Independent Appraiser, in which
      case, the fair market value shall be equal to the average of the determinations
      by each such Independent Appraiser; and provided,
      further
      that all
      determinations of the Per Share Market Value shall be appropriately adjusted
      for
      any stock dividends, stock splits or other similar transactions during such
      period. The determination of fair market value by an Independent Appraiser
      shall
      be based upon the fair market value of the Issuer determined on a going concern
      basis as between a willing buyer and a willing seller and

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    taking
      into account all relevant factors determinative of value, and shall be final
      and
      binding on all parties. In determining the fair market value of any shares
      of
      Common Stock, no consideration shall be given to any restrictions on transfer
      of
      the Common Stock imposed by agreement or by federal or state securities laws,
      or
      to the existence or absence of, or any limitations on, voting
      rights.

    

    "Purchase
      Agreement"
      means
      the Series D Convertible Preferred Stock Purchase Agreement dated as of June
      12,
      2007, among the Issuer and the Purchasers.

    

    "Purchasers"
      means
      the purchasers of the Series D Convertible Preferred Stock and the Warrants
      issued by the Issuer pursuant to the Purchase Agreement.

    

    "Securities"
      means
      any debt or equity securities of the Issuer, whether now or hereafter
      authorized, any instrument convertible into or exchangeable for Securities
      or a
      Security, and any option, warrant or other right to purchase or acquire any
      Security. "Security" means one of the Securities.

    

    "Securities
      Act"
      means
      the Securities Act of 1933, as amended, or any similar federal statute then
      in
      effect.

    

    "Subsidiary"
      means
      any corporation at least 50% of whose outstanding Voting Stock shall at the
      time
      be owned directly or indirectly by the Issuer or by one or more of its
      Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

    

    "Term"
      has the
      meaning specified in Section 1 hereof.

    

    "Trading
      Day"
      means
      (a) a day on which the Common Stock is quoted on the OTC Bulletin Board, or
      (b)
      if the Common Stock is not quoted on the OTC Bulletin Board, a day on which
      the
      Common Stock is quoted in the over-the-counter market as reported by Pink
      Sheets, LLC (or any similar organization or agency succeeding its functions
      of
      reporting prices); provided,
      however,
      that in
      the event that the Common Stock is not listed or quoted as set forth in (a)
      or
      (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and
      any
      day which shall be a legal holiday or a day on which banking institutions in
      the
      State of New York are authorized or required by law or other government action
      to close.

    

    "Voting
      Stock"
      means,
      as applied to the Capital Stock of any corporation, Capital Stock of any class
      or classes (however designated) having ordinary voting power for the election
      of
      a majority of the members of the Board (or other governing body) of such
      corporation, other than Capital Stock having such power only by reason of the
      happening of a contingency.

    

    "Warrants"
      means
      the Warrants issued and sold pursuant to the Purchase Agreement, including,
      without limitation, this Warrant, and any other warrants of like tenor issued
      in
      substitution or exchange for any thereof pursuant to the provisions of Section
      2(c), 2(d) or 2(e) hereof or of any of such other Warrants. 

    

    "Warrant
      Price"
      initially means $1.87, as such price may be adjusted from time to time in
      accordance with the adjustments specified in this Warrant, including Section
      4
      hereto.

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    "Warrant
      Share Number"
      means
      at any time the aggregate number of shares of Warrant Stock which may at such
      time be purchased upon exercise of this Warrant, after giving effect to all
      prior adjustments and increases to such number made or required to be made
      under
      the terms hereof.

    

    "Warrant
      Stock"
      means
      Common Stock issuable upon exercise of any Warrant or Warrants or otherwise
      issuable pursuant to any Warrant or Warrants.

    

    10. Other
      Notices.
      In case
      at any time:

    

    
      	 	
              (A)

            	
              the
                Issuer shall make any distributions to the holders of Common Stock;
                or

            

    

    

    
      	 	
              (B)

            	
              the
                Issuer shall authorize the granting to all holders of its Common
                Stock of
                rights to subscribe for or purchase any shares of Capital Stock of
                any
                class or other rights; or

            

    

    

    
      	 	
              (C)

            	
              there
                shall be any reclassification of the Capital Stock of the Issuer;
                or

            

    

    

    
      	 	
              (D)

            	
              there
                shall be any capital reorganization by the Issuer;
                or

            

    

    

    
      	 	
              (E)

            	
              there
                shall be any (i) consolidation or merger involving the Issuer or
                (ii)
                sale, transfer or other disposition of all or substantially all of
                the
                Issuer's property, assets or business (except a merger or other
                reorganization in which the Issuer shall be the surviving corporation
                and
                its shares of Capital Stock shall continue to be outstanding and
                unchanged
                and except a consolidation, merger, sale, transfer or other disposition
                involving a wholly-owned Subsidiary);
                or

            

    

    

    
      	 	
              (F)

            	
              there
                shall be a voluntary or involuntary dissolution, liquidation or winding-up
                of the Issuer or any partial liquidation of the Issuer or distribution
                to
                holders of Common Stock;

            

    

    

    then,
      in
      each of such cases, the Issuer shall give written notice to the Holder of the
      date on which (i) the books of the Issuer shall close or a record shall be
      taken
      for such dividend, distribution or subscription rights or (ii) such
      reorganization, reclassification, consolidation, merger, disposition,
      dissolution, liquidation or winding-up, as the case may be, shall take place.
      Such notice also shall specify the date as of which the holders of Common Stock
      of record shall participate in such dividend, distribution or subscription
      rights, or shall be entitled to exchange their certificates for Common Stock
      for
      securities or other property deliverable upon such reorganization,
      reclassification, consolidation, merger, disposition, dissolution, liquidation
      or winding-up, as the case may be. Such notice shall be given at least twenty
      (20) days prior to the action in question and not less than ten (10) days prior
      to the record date or the date on which the Issuer's transfer books are closed
      in respect thereto. This Warrant entitles the Holder to receive copies of all
      financial and other information distributed or required to be distributed to
      the
      holders of the Common Stock.

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    11. Amendment
      and Waiver.
      Any
      term, covenant, agreement or condition in this Warrant may be amended, or
      compliance therewith may be waived (either generally or in a particular instance
      and either retroactively or prospectively), by a written instrument or written
      instruments executed by the Issuer and the Majority Holders; provided,
      however,
      that no
      such amendment or waiver shall reduce the Warrant Share Number, increase the
      Warrant Price, shorten the period during which this Warrant may be exercised
      or
      modify any provision of this Section 11 without the consent of the Holder of
      this Warrant. No consideration shall be offered or paid to any person to amend
      or consent to a waiver or modification of any provision of this Warrant unless
      the same consideration is also offered to all holders of the
      Warrants.

    

    12. Governing
      Law; Jurisdiction.
      This
      Warrant shall be governed by and construed in accordance with the internal
      laws
      of the State of New York, without giving effect to any of the conflicts of
      law
      principles which would result in the application of the substantive law of
      another jurisdiction. This Warrant shall not be interpreted or construed with
      any presumption against the party causing this Warrant to be drafted. The Issuer
      and the Holder agree that venue for any dispute arising under this Warrant
      will
      lie exclusively in the state or federal courts located in New York County,
      New
      York, and the parties irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The Issuer and the Holder
      irrevocably consent to personal jurisdiction in the state and federal courts
      of
      the state of New York. The Issuer and the Holder consent to process being served
      in any such suit, action or proceeding by mailing a copy thereof to such party
      at the address in effect for notices to it under this Warrant and agrees that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section 12 shall affect or limit any right to serve
      process in any other manner permitted by law. The Issuer and the Holder hereby
      agree that the prevailing party in any suit, action or proceeding arising out
      of
      or relating to this Warrant or the Purchase Agreement, shall be entitled to
      reimbursement for reasonable legal fees from the non-prevailing party. The
      parties hereby waive all rights to a trial by jury.

    

    13. Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery or delivery by telecopy, e-mail or facsimile at the address or number
      designated below (if delivered on a business day during normal business hours
      where such notice is to be received), or the first business day following such
      delivery (if delivered other than on a business day during normal business
      hours
      where such notice is to be received) or (b) on the second business day following
      the date of mailing by express courier service, fully prepaid, addressed to
      such
      address, or upon actual receipt of such mailing, whichever shall first occur.
      The addresses for such communications shall be:

     

    If
      to the
      Issuer:

    BPO
      Management Services, Inc.

    1290
      N.
      Hancock, Ste 202

    Anaheim,
      CA 92807

    Attention:
      Chief Executive Officer 

    Tel.
      No.:
      (714) 974-2670

    Fax
      No.:
      (714) 974-4771

    E-mail:
      patrick.dolan@bpoms.com

    

    with
      copies (which copies 

    shall
      not
      constitute notice) 

    to:

    Bryan
      Cave LLP

    1900
      Main
      Street, Suite 700

    Irvine,
      CA 92614

     

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

    Attention:
      Randolf W. Katz, Esq.

    Tel.
      No.:
      (949) 223-7103

    Fax
      No.:
      (949) 223-7100

    E-mail:
      rwkatz@bryancave.com

    

    and

    

    Cornman
      & Swartz

    19800
      MacArthur Blvd., Suite 820

    Irvine,
      CA 92612

    Attention:
      Jack T. Cornman, Esq.

    Tel.
      No.:
      (949) 224-1500

    Fax
      No.:
      (949) 224-1505

    

    If
      to any
      Holder: At
      the
      address of such Holder set forth on Exhibit
      A
      to the
      Purchase Agreement or as specified in writing by such Holder with copies
      to:

    

    with
      copies (which copies 

    shall
      not
      constitute notice) 

    to:

    Sheppard,
      Mullin, Richter & Hampton LLP

    333
      S.
      Hope Street, 48th Floor

    Los
      Angeles, CA 90071

    Attention:
      David I. Sunkin, Esq.

    Tel
      No.:
      (213) 620-1780

    Fax
      No.:
      (213) 443-2750

    E-mail:
      dsunkin@sheppardmullin.com

    

    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other party hereto.

     

    14. Warrant
      Agent.
      The
      Issuer may, by written notice to each Holder of this Warrant, appoint an agent
      having an office in New York, New York for the purpose of issuing shares of
      Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of
      Section 2 hereof, exchanging this Warrant pursuant to subsection (d) of Section
      2 hereof or replacing this Warrant pursuant to subsection (d) of Section 3
      hereof, or any of the foregoing, and thereafter any such issuance, exchange
      or
      replacement, as the case may be, shall be made at such office by such
      agent.

    

    15. Remedies.
      The
      Issuer stipulates that the remedies at law of the Holder of this Warrant in
      the
      event of any default or threatened default by the Issuer in the performance
      of
      or compliance with any of the terms of this Warrant are not and will not be
      adequate and that, to the fullest extent permitted by law, such terms may be
      specifically enforced by a decree for the specific performance of any agreement
      contained herein or by an injunction against a violation of any of the terms
      hereof or otherwise.

    

    16. Successors
      and Assigns.
      This
      Warrant and the rights evidenced hereby shall inure to the benefit of and be
      binding upon the successors and assigns of the Issuer, the Holder hereof and
      (to
      the extent provided herein) the Holders of Warrant Stock issued pursuant hereto,
      and shall be enforceable by any such Holder or Holder of Warrant
      Stock.

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    17. Modification
      and Severability.
      If, in
      any action before any court or agency legally empowered to enforce any provision
      contained herein, any provision hereof is found to be unenforceable, then such
      provision shall be deemed modified to the extent necessary to make it
      enforceable by such court or agency. If any such provision is not enforceable
      as
      set forth in the preceding sentence, the unenforceability of such provision
      shall not affect the other provisions of this Warrant, but this Warrant shall
      be
      construed as if such unenforceable provision had never been contained
      herein.

    

    18. Headings.
      The
      headings of the Sections of this Warrant are for convenience of reference only
      and shall not, for any purpose, be deemed a part of this Warrant.

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the Issuer has executed this Series D Warrant as of the day
      and
      year first above written.

    

    

    BPO
      MANAGEMENT SERVICES, INC.

     

     

    By:

    
      
        

      

    

    Name:

    Title:

     

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

     

    EXERCISE
      FORM

    SERIES
      D
      WARRANT

    

    BPO
      MANAGEMENT SERVICES, INC.

    

    The
      undersigned _______________, pursuant to the provisions of the within Warrant,
      hereby elects to purchase _____ shares of Common Stock of BPO Management
      Services, Inc. covered by the within Warrant.

    

    Dated:
      _________________

    Signature
      ____________________________

    Address 
      _____________________________

    ____________________________________

    

    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      Holder on the date of Exercise:  _________________________

    

    The
      undersigned is an “accredited investor” as defined in Regulation D under the
      Securities Act of 1933, as amended.

     

    The
      undersigned intends that payment of the Warrant Price shall be made as (check
      one): 

     

    Cash
      Exercise_______ 

     

    Cashless
      Exercise_______

     

    If
      the
      Holder has elected a Cash Exercise, the Holder shall pay the sum of $________
      by
      certified or official bank check (or via wire transfer) to the Issuer in
      accordance with the terms of the Warrant. 

     

    If
      the
      Holder has elected a Cashless Exercise, a certificate shall be issued to the
      Holder for the number of shares equal to the whole number portion of the product
      of the calculation set forth below, which is ___________. The Issuer shall
      pay a
      cash adjustment in respect of the fractional portion of the product of the
      calculation set forth below in an amount equal to the product of the fractional
      portion of such product and the Per Share Market Value on the date of exercise,
      which product is ____________.

     

    X
      = Y -
(A)(Y)

    B

    

    Where: 

    

    The
      number of shares of Common Stock to be issued to the Holder
      __________________(“X”).

    

    The
      number of shares of Common Stock purchasable upon exercise of all of the Warrant
      or, if only a portion of the Warrant is being exercised, the portion of the
      Warrant being exercised ___________________________ (“Y”). 

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

    The
      Warrant Price ______________ (“A”). 

    

    The
      Per
      Share Market Value of one share of Common Stock _______________________
      (“B”).

     

    ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the within Warrant and all rights evidenced thereby and
      does
      irrevocably constitute and appoint _____________, attorney, to transfer the
      said
      Warrant on the books of the within named corporation.

    

    Dated:
      _________________

    Signature 
      ___________________________

    Address 
      ____________________________

    ____________________________________

    

    PARTIAL
      ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the right to purchase _________ shares of Warrant Stock
      evidenced by the within Warrant together with all rights therein, and does
      irrevocably constitute and appoint ___________________, attorney, to transfer
      that part of the said Warrant on the books of the within named
      corporation.

    

    Dated:
      _________________

    Signature 
      ___________________________

    Address 
      ____________________________

    ____________________________________

    

    FOR
      USE
      BY THE ISSUER ONLY:

    

    This
      Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
      ___________, _____, shares of Common Stock issued therefor in the name of
      _______________, Warrant No. W-_____ issued for ____ shares of Common Stock
      in
      the name of _______________.

     

    
      
         

      

      
        -23-Escrow
      Agreement

     

    by
      and
      among

     

    BPO
      Management Services, Inc.,

     

    Vision
      Opportunity Capital Management, LLC

     

     

    and

     

     

    U.S.
      Bank
      National Association

     

     

    Dated
      as
      of June 11, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ESCROW
      AGREEMENT

     

    THIS
      ESCROW AGREEMENT (this "Agreement") is dated as of the 11th day
      of June, 2007, by and among BPO Management Services, Inc., a Delaware
      corporation (the "Company"), Vision Opportunity Capital Management, LLC, a
      Delaware limited liability company ("Vision"), and U.S. Bank National
      Association, a national banking association (the "Escrow Agent"), as escrow
      agent. Vision, the Purchasers (as defined in the Purchase Agreement) and the
      Company are sometimes referred to herein, collectively, as the "Interested
      Parties." Capitalized terms used but not defined herein shall have the meanings
      set forth in the Purchase Agreement (as defined below).

     

    WHEREAS,
      the Purchasers will be purchasing from the Company shares of Series D
      convertible preferred stock (the “Preferred Shares”), convertible into shares of
      the Company’s common stock, par value $0.01 per share, and Series A Warrants,
      Series B Warrants, Series J Warrants, Series C Warrants and Series D Warrants
      (all such warrants and the Preferred Shares, the “Securities”) pursuant to a
      Series D Convertible Preferred Stock Purchase Agreement dated as of June 12,
      2007, by and among the Company and the Purchasers (the “Purchase Agreement”),
      pursuant to which a portion of the Purchase Price has been withheld and is
      to be
      deposited in escrow as a source of payment for the Acquisitions pursuant to
      Section 3.11 of the Purchase Agreement; and

     

    WHEREAS,
      Vision wishes to engage the Escrow Agent to act, and the Escrow Agent is willing
      to act, as escrow agent hereunder and, in that capacity, to hold, administer
      and
      distribute the amounts deposited in escrow hereunder in accordance with, and
      subject to, the terms of this Agreement;

     

    NOW
      THEREFORE, for valuable consideration, the receipt whereof is hereby
      acknowledged, the parties hereto agree as follows:

     

    
      	
              Section
                1.

            	
              Deposit
                of Escrow Funds.

            

    

     

    On
      the
      date hereof, the Purchasers shall deposit with the Escrow Agent in immediately
      available funds the amount of $14,000,000 (the "Escrow Funds," and together
      with
      any investment income or proceeds received by the Escrow Agent from the
      investment thereof from time to time pursuant to Section 3 below, collectively,
      the "Escrow Property"), and the Escrow Agent agrees to hold the Escrow Property
      in an account established with the Escrow Agent (the "Escrow Account"), and
      to
      administer the Escrow Property in accordance with the terms of this
      Agreement.

     

    
      	
              Section
                2.

            	
              Release
                from Escrow.

            

    

     

    The
      Escrow Property shall be released upon Closing in accordance with the
      Disbursement Instructions attached hereto as Exhibit A.

     

    
      	
              Section
                3.

            	
              Investment
                of Funds.

            

    

     

    (a) The
      Escrow Agent shall invest the Escrow Property in the Escrow Agent's Insured
      Money Market Account ("IMMA"). The Escrow Property and all investments thereof
      shall be held and, if registrable, shall be registered in the name of the Escrow
      Agent under "Escrow Agreement dated June 11, 2007 by and among BPO
      Management Services, Inc., Vision Opportunity Capital Management, LLC, and
      U.S.
      Bank National Association, as escrow agent."

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (b) All
      earnings received from the investment of the Escrow Funds shall be credited
      to
      the Company. The Escrow Agent shall have no liability for any investment losses,
      including without limitation any market loss on any investment liquidated prior
      to maturity in order to make a payment required hereunder.

     

    (c) The
      Interested Parties agree that, for tax reporting purposes, all interest and
      other income earned from the investment of the Escrow Funds in any tax year
      shall be reported by the Company.

     

    (d) Each
      of
      the Interested Parties agrees to provide the Escrow Agent with a certified
      tax
      identification number by signing and returning a Form W-9 (or Form W-8
      BEN, in case of non-U.S. persons) to the Escrow Agent upon the execution and
      delivery of this Agreement. The Interested Parties understand that, in the
      event
      their tax identification numbers are not certified to the Escrow Agent, the
      Internal Revenue Code, as amended from time to time, may require withholding
      of
      a portion of any interest or other income earned on the investment from the
      Escrow Funds. The Interested Parties agree to instruct the Escrow Agent in
      writing with respect to the Escrow Agent's responsibility for withholding and
      other taxes, assessments or other governmental charges, and to instruct the
      Escrow Agent with respect to any certifications and governmental reporting
      that
      may be required under any laws or regulations that may be applicable in
      connection with its acting as Escrow Agent under this Agreement.

     

    
      	
              Section
                4.

            	
              Intentionally
                Omitted.

            

    

     

    
      	
              Section
                5.

            	
              Concerning
                the Escrow Agent.

            

    

     

    (a) Each
      Interested Party acknowledges and agrees that the Escrow Agent (i) shall
      not be responsible for any of the agreements referred to or described herein
      (including, without limitation the Purchase Agreement), or for determining
      or
      compelling compliance therewith, and shall not otherwise be bound thereby,
      (ii) shall be obligated only for the performance of such duties as are
      expressly and specifically set forth in this Agreement on its part to be
      performed, each of which is ministerial (and shall not be construed to be
      fiduciary) in nature, and no implied duties or obligations of any kind shall
      be
      read into this Agreement against or on the part of the Escrow Agent,
      (iii) shall not be obligated to take any legal or other action hereunder
      which might in its judgment involve or cause it to incur any expense or
      liability unless it shall have been furnished with acceptable indemnification,
      (iv) may rely on and shall be protected in acting or refraining from acting
      upon any written notice, instruction (including, without limitation, wire
      transfer instructions, whether incorporated herein or provided in a separate
      written instruction), instrument, statement, certificate, request or other
      document furnished to it hereunder and believed by it in good faith to be
      genuine and to have been signed or presented by the proper person, and shall
      have no responsibility or duty to make inquiry as to or to determine the
      genuineness, accuracy or validity thereof (or any signature appearing thereon),
      or of the authority of the person signing or presenting the same, and (v) may
      consult counsel satisfactory to it, including in-house counsel, and the opinion
      or advice of such counsel in any instance shall be full and complete
      authorization and protection in respect of any action taken, suffered or omitted
      by it hereunder in good faith and in accordance with the opinion or advice
      of
      such counsel.

     

    (b) The
      Escrow Agent shall not be liable to anyone for any action taken or omitted
      to be
      taken by it hereunder except in the case of the Escrow Agent's gross negligence
      or willful misconduct in breach of the terms of this Agreement. In no event
      shall the Escrow Agent be liable for indirect, punitive, special or
      consequential damage or loss (including but not limited

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    to
      lost
      profits) whatsoever, even if the Escrow Agent has been informed of the
      likelihood of such loss or damage and regardless of the form of action, unless
      due to the Escrow Agent's willful misconduct or fraud.

     

    (c) The
      Escrow Agent shall have no more or less responsibility or liability on account
      of any action or omission of any book-entry depository, securities intermediary
      or other subescrow agent employed by the Escrow Agent than any such book-entry
      depository, securities intermediary or other subescrow agent has to the Escrow
      Agent, except to the extent that such action or omission of any book-entry
      depository, securities intermediary or other subescrow agent was caused by
      the
      Escrow Agent's own gross negligence or willful misconduct in breach of this
      Agreement.

     

    (d) The
      Escrow Agent is hereby authorized, in making or disposing of any investment
      permitted by this Agreement, to deal with itself (in its individual capacity)
      or
      with any one or more of its affiliates, whether it or such affiliate is acting
      as a subagent of the Escrow Agent or for any third person or dealing as
      principal for its own account.

     

    (e) Notwithstanding
      any term appearing in this Agreement to the contrary, in no instance shall
      the
      Escrow Agent be required or obligated to distribute any Escrow Property (or
      take
      other action that may be called for hereunder to be taken by the Escrow Agent)
      sooner than two (2) Business Days after (i) it has received the
      applicable documents required under this Agreement in good form, or
      (ii) passage of the applicable time period (or both, as applicable under
      the terms of this Agreement), as the case may be.

     

    
      	
              Section
                6.

            	
              Compensation,
                Expense Reimbursement and
                Indemnification.

            

    

     

    (a) The
      Company agrees to pay the Escrow Agent's fees and expenses hereunder in
      accordance with the fee schedule attached hereto as Schedule 1
      and made
      a part hereof, which may be subject to change hereafter by the Escrow Agent
      on
      an annual basis. 

     

    (b) The
      Company agrees to reimburse the Escrow Agent on demand for all costs and
      expenses incurred in connection with the administration of this Agreement or
      the
      escrow created hereby or the performance or observance of its duties hereunder
      which are in excess of its compensation for normal services hereunder, including
      without limitation, payment of any legal fees and expenses incurred by the
      Escrow Agent in connection with resolution of any claim by any party
      hereunder.

     

    (c) The
      Company agrees to indemnify the Escrow Agent (and its directors, officers and
      employees) and hold it (and such directors, officers and employees) harmless
      from and against any loss, liability, damage, cost and expense of any nature
      incurred by the Escrow Agent arising out of or in connection with this Agreement
      or with the administration of its duties hereunder, including but not limited
      to
      attorney's fees and other costs and expenses of defending or preparing to defend
      against any claim of liability (collectively, "Losses"), unless and except
      to
      the extent such Losses are caused by the Escrow Agent's gross negligence, or
      willful misconduct. 

     

    (d) The
      foregoing indemnification and agreement to hold harmless shall survive the
      termination of this Agreement. 

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
      	Section
              7.	
              Termination.

            

    

     

    This
      Agreement, and the escrow created hereunder, shall terminate upon the release
      and/or distribution of all amounts comprising the Escrow Property, as provided
      herein, and the fulfillment of all of the Escrow Agent's obligations
      hereunder.

     

    
      	
              Section
                8.

            	
              Tax
                Indemnification.

            

    

     

    The
      Company agrees (i) to assume any and all obligations imposed now or hereafter
      by
      any applicable tax law with respect to any payment or distribution of the Escrow
      Property or performance of other activities under this Agreement, (ii) to
      instruct the Escrow Agent in writing with respect to the Escrow Agent's
      responsibility for withholding and other taxes, assessments or other
      governmental charges, and to instruct the Escrow Agent with respect to any
      certifications and governmental reporting that may be required under any laws
      or
      regulations that may be applicable in connection with its acting as Escrow
      Agent
      under this Agreement, and (iii) to indemnify and hold the Escrow Agent
      harmless from any liability or obligation on account of taxes, assessments,
      additions for late payment, interest, penalties, expenses and other governmental
      charges that may be assessed or asserted against the Escrow Agent in connection
      with, on account of or relating to the Escrow Property, the management
      established hereby, any payment or distribution of or from the Escrow Property
      pursuant to the terms hereof or other activities performed under the terms
      of
      this Agreement, including without limitation any liability for the withholding
      or deduction of (or the failure to withhold or deduct) the same, and any
      liability for failure to obtain proper certifications or to report properly
      to
      governmental authorities in connection with this Agreement, including costs
      and
      expenses (including reasonable legal fees and expenses), interest and penalties.
      The foregoing indemnification and agreement to hold harmless shall survive
      the
      termination of this Agreement.

     

    
      	
              Section
                9.

            	
              Resignation.

            

    

     

    The
      Escrow Agent may at any time resign as Escrow Agent hereunder by giving
      thirty (30) days' prior written notice of resignation to each of the
      Interested Parties. Prior to the effective date of the resignation as specified
      in such notice, Vision will issue to the Escrow Agent a written instruction
      authorizing redelivery of the Escrow Property to a bank or trust company that
      it
      selects as successor to the Escrow Agent hereunder. 

     

    
      	
              Section
                10.

            	
              Dispute
                Resolution.

            

    

     

    It
      is
      understood and agreed that, should any dispute arise with respect to the
      delivery, ownership, right of possession, and/or disposition of the Escrow
      Property, or should any claim be made upon the Escrow Agent or the Escrow
      Property by a third party, the Escrow Agent upon receipt of notice of such
      dispute or claim is authorized and shall be entitled (at its sole option and
      election) to retain in its possession without liability to anyone, all or any
      of
      the Escrow Property until such dispute shall have been settled either by the
      mutual written agreement of the parties involved or by a final order, decree
      or
      judgment of a court of competent jurisdiction in the United States of America,
      the time for perfection of an appeal of such order, decree or judgment having
      expired. The Escrow Agent may, but shall be under no duty whatsoever to,
      institute or defend any legal proceedings which relate to the Escrow
      Property.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	Section
              11.	
              Governing
                Law; Submission to Jurisdiction.

            

    

     

    This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California applicable to agreements made and to be performed entirely
      within such state. Each party hereby irrevocably and unconditionally consents
      to
      submit to the exclusive jurisdiction of the courts of the State of California
      or
      the courts of the United States of America located in Los Angeles for any
      actions, suits, or proceedings arising out of or relating to this Agreement
      (and
      the parties agree not to commence any action, suit, or proceeding relating
      thereto except in such courts), and further agrees that service of any process,
      summons, notice, or document by U.S. registered mail to the respective addresses
      set forth above shall be effective service of process for any action, suit,
      or
      proceeding brought against the parties in any such court. Each party hereby
      irrevocably and unconditionally waives any objection to the laying of venue
      of
      any action, suit, or proceeding arising out of this Agreement, in the courts
      of
      the State of California or the United States of America located in Los Angeles,
      and hereby further irrevocably and unconditionally waives its right and agrees
      not to plead or claim in any such court that any such action, suit, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

     

    
      	
              Section
                12.

            	
              Waiver
                of Jury Trial.

            

    

     

    THE
      ESCROW AGENT AND THE INTERESTED PARTIES HEREBY WAIVE A TRIAL BY JURY OF ANY
      AND
      ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN THEM OR THEIR SUCCESSORS
      OR ASSIGNS, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF ITS PROVISIONS
      OR ANY NEGOTIATIONS IN CONNECTION HEREWITH.

     

    
      	
              Section
                13.

            	
              Force
                Majeure.

            

    

     

    The
      Escrow Agent shall not be responsible for delays or failures in performance
      resulting from acts beyond its control. Such acts shall include but not be
      limited to acts of God, strikes, lockouts, riots, acts of war, epidemics,
      governmental regulations superimposed after the fact, fire, communication line
      failures, computer viruses, power failures, earthquakes or other
      disasters.

     

    
      	
              Section
                14.

            	
              Notices;
                Wiring Instructions.

            

    

     

    (a) Notice
      Addresses.
      Any
      notice permitted or required hereunder shall be in writing, and shall be sent
      (i) by personal delivery, overnight delivery by a recognized courier or
      delivery service, or (ii) mailed by registered or certified mail, return
      receipt requested, postage prepaid, or (iii) by confirmed telecopy
      accompanied by mailing of the original on the same day by first class mail,
      postage prepaid, in each case the parties at their address set forth below
      (or
      to such other address as any such party may hereafter designate by written
      notice to the other parties).

     

    If
      to
      Vision:

     

    Vision
      Opportunity Capital Management, LLC

    20
      W.
      55th Street, 5th floor

    New
      York,
      NY 10019

    Attn:
      Adam Benowitz and Antti Uusiheimala

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    With
      a
      copy to (which copy shall not constitute notice):

     

    Sheppard,
      Mullin, Richter & Hampton LLP

    333
      South
      Hope Street

    Forty-Eighth
      Floor

    Los
      Angeles, CA 90071

    Attn:
      David I. Sunkin, Esq.

    Telephone:
      (213) 620-1780

    Facsimile:
      (213) 443-2750

    

    If
      to The
      Company:

     

    BPO
      Management Services, Inc. 

    1290
      N.
      Hancock, Ste 202

    Anaheim,
      CA 92807

    Attention:
      Chief Executive Officer 

    Tel.
      No.:
      (714) 974-2670

    Fax
      No.:
      (714) 974-4771

    

    With
      a
      copy to (which copy shall not constitute notice):

     

    Bryan
      Cave LLP

    1900
      Main
      Street, Suite 700

    Irvine,
      CA 92614

    Attention:
      Randolf W. Katz, Esq.

    Tel.
      No.:
      (949) 223-7103

    Fax
      No.:
      (949) 223-7100

    

    and

    

    Cornman
      & Swartz

    19800
      MacArthur Blvd., Suite 820

    Irvine,
      CA 92612

    Attention:
      Jack T. Cornman, Esq.

    Tel.
      No.:
      (949) 224-1500

    Fax
      No.:
      (949) 224-1505

    

    If
      to
      Escrow Agent:

     

    U.S.
      Bank
      National Association

    Corporate
      Trust Services

    633
      West
      Fifth Street, 24th
      Floor

    Los
      Angeles, CA 90071

    Attention:
      Brad E. Scarbrough

    Facsimile:
      (213) 615-6197

    Telephone:
      (213) 615-6047

    

    Notwithstanding
      the foregoing, notices addressed to the Escrow Agent shall be effective only
      upon receipt. If any notice or document is required to be delivered to the
      Escrow Agent and

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    any
      other
      person, the Escrow Agent may assume without inquiry that each notice or document
      was received by such other person when it is received by the Escrow
      Agent.

     

    (b) Wiring
      Instructions.
      Any
      funds to be paid by the Escrow Agent to the Company, or to the Purchasers,
      or to
      be paid to the Escrow Agent hereunder, shall be sent by wire transfer pursuant
      to such instruction as may have been given in advance and in writing to or
      by
      the Company, Vision or the Escrow Agent, as applicable.

     

    
      	
              Section
                15.

            	
              Miscellaneous.

            

    

     

    (a) Binding
      Effect; Successors.
      This
      Agreement shall be binding upon the respective parties hereto and their heirs,
      executors, successors and assigns. If the Escrow Agent consolidates, merges
      or
      converts into, or transfers all or substantially all of its corporate trust
      business (including the escrow contemplated by this Agreement) to, another
      corporation, the successor corporation without any further act shall be the
      successor Escrow Agent.

     

    (b) Modifications.
      This
      Agreement may not be altered or modified without the express written consent
      of
      the parties hereto. No course of conduct shall constitute a waiver of any of
      the
      terms and conditions of this Escrow Agreement, unless such waiver is specified
      in writing, and then only to the extent so specified. A waiver of any of the
      terms and conditions of this Escrow Agreement on one occasion shall not
      constitute a waiver of the other terms of this Escrow Agreement, or of such
      terms and conditions on any other occasion. Notwithstanding any other provision
      hereof, consent to an alteration or modification of this Agreement may not
      be
      signed by means of an e-mail address.

     

    (c) Reproduction
      of Documents.
      This
      Agreement and all documents relating thereto, including, without limitation,
      (a) consents, waivers and modifications which may hereafter be executed,
      and (b) certificates and other information previously or hereafter
      furnished, may be reproduced by any photographic, photostatic, microfilm,
      optical disk, micro-card, miniature photographic or other similar process.
      The
      parties agree that any such reproduction shall be admissible in evidence as
      the
      original itself in any judicial or administrative proceeding, whether or not
      the
      original is in existence and whether or not such reproduction was made by a
      party in the regular course of business, and that any enlargement, facsimile
      or
      further reproduction of such reproduction shall likewise be admissible in
      evidence.

     

    (d) Counterparts
      and Facsimile Execution.
      This
      Escrow Agreement may be executed in several counterparts, each of which shall
      be
      deemed to be one and the same instrument. The exchange of copies of this
      Agreement and of signature pages by facsimile transmission shall constitute
      effective execution and delivery of this Agreement as to the parties and may
      be
      used in lieu of the original Agreement for all purposes. Signatures of the
      parties transmitted by facsimile shall be deemed to be their original signatures
      for all purposes.

     

    (e) Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable under
      applicable law, such provision shall be excluded from this Agreement and the
      balance of the Agreement shall be interpreted as if such provision were so
      excluded and shall be enforceable in accordance with its terms.

     

     

    (e) U.S.A.
      Patriot Act Compliance Information.
      Vision,
      the Purchasers and the Company each shall provide to the Escrow Agent such
      information as the Escrow Agent may reasonably require to permit the Escrow
      Agent to comply with its obligations under the federal U.S.A. Patriot Act. 
The Escrow Agent shall not credit any amount of interest or
      investment

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    proceeds
      earned on the Escrow Funds, or make any payment of all or a portion of the
      Escrow Funds, to any person unless and until such person has provided to the
      Escrow Agent such documents as the Escrow Agent may require to permit the Escrow
      Agent to comply with its obligations under such Act.

     

    [Signature
      Pages to Follow]

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of this
      11th day of June, 2007.

     

     

     

    
      	
              BPO
                Management Services, Inc. 

               

               

              By: 
                /s/ Patrick A. Dolan

              
                

              

              Name: 
                Patrick A. Dolan

              Title:   
                Chairman and CEO

            	 
	 	 
	
              ESCROW
                AGENT:

            	 
	 	 
	
              U.S.
                Bank National Association, as Escrow Agent

            	 
	
               

               

              By: 
                /s/ Brad Scarbrough

              
                

              

              Name: 
                Brad Scarbrough

              Title:   
                Vice President

            	 

    

     

     

    [Company
      and Escrow Agent Signature Page to Escrow Agreement]

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

     

    Vision
      Opportunity Capital Management, LLC 

    

    

    By: 
      /s/ Adam Benowitz

      
        

      

    

    Name: 
      Adam Benowitz

    Title:   
      Managing Manager

    

     

     

    [Purchaser
      Signature Page to Escrow Agreement]

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      1

     

    

    Initial
      Fees

    
      	 	 
	
              Acceptance
                Fee (excluding charge for legal counsel and/or legal
                opinion)

               

              The
                acceptance fee includes the administrative review of all documents,
                initial set-up of the account, and other reasonably required services
                up
                to and including the closing. This is a one-time fee, payable at
                closing.
                

               

              U.S.
                Bank Corporate Trust Services reserve the right to refer any and
                all
                escrow documents for legal review before execution. Legal fees (billed
                on
                an hourly basis) and expenses for this service will be billed to,
                and paid
                by, the customer. If appropriate and upon request by the customer,
                U.S.
                Bank Corporate Trust Service will provide advance estimates of these
                legal
                fees.

            	
              $1,000.00

            
	 	 
	
              Counsel
                Fee

              Payable
                at closing, this Includes fees and expenses of legal counsel as well
                as
                the rendering of standard legal opinion, if required. Daniel P. Brown,
                Esq. of Shipman & Goodwin LLP will serve as Trustee’s
                counsel.

            	
              At
                Cost

            
	 	 
	
              Escrow
                Agent

              Annual
                Administration fee for performance of the routine duties of the escrow
                agent associated with the management of the account. Administration
                Fees
                are payable in advance

            	
              $3,000.00

            
	 	 
	
              Incidental
                Expenses

              Charge
                for miscellaneous expenses such as fax; messenger service, overnight
                mail,
                telephone, stationary and postage. This charge is a percent of total
                Administration Fees charged in advance

            	
              0%

            
	 	 

    

    Direct
      Out of Pocket Expenses

    
      	Reimbursement
              of expenses associated with the performance of our duties, including
              but
              not limited to publications, legal counsel after the initial close,
              travel
              expenses and filing fees.	
              At
                Cost

            

    

     

    Extraordinary
      Services

    
      	Extraordinary
              services are duties or responsibilities of an unusual nature, but not
              provided for in the governing documents or otherwise set forth in this
              schedule. A reasonable charge will be assessed based on the nature
              of the
              service and the responsibility involved. At our option, these charges
              will
              be billed at a flat fee or at our hourly rate then in effect. Examples
              include:taxpayer
              ID number solicitationclaim
              distributionsexecution
              of amendments/supplement agreements	 

    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    DISBURSEMENT
      INSTRUCTIONS

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