LOCK-UP AGREEMENT
THIS
LOCK-UP AGREEMENT (this "Agreement")
is
dated as of June 13, 2007 by and among BPO Management Services, Inc., a Delaware
corporation (the "Company"),
and
the Stockholders of the Company listed on Schedule
A
attached
hereto (collectively, the "Stockholders").
WHEREAS,
to induce the Company and the investors (the “Investors”)
to
enter into the Series D Convertible Preferred Stock Purchase Agreement dated
as
of the date hereof (the “Purchase
Agreement”)
by and
among the Company and the Investors, the Stockholders have agreed not to sell
any Securities (as defined below) of the Company that such Stockholders
presently own or may acquire after the date hereof, except in accordance with
the terms and conditions set forth herein. Capitalized terms used herein without
definition shall have the meanings assigned to such terms in the Purchase
Agreement.
NOW,
THEREFORE, in consideration of the covenants and conditions hereinafter
contained, the parties hereto agree as follows:
1.Restriction
on Transfer; Term.
From
the period commencing on the Closing Date and expiring on the date that is
the
earlier of (a) September 30, 2008 or (b) six (6) months following the effective
date of the registration statement filed by the Company with the Securities
and
Exchange Commission providing for the resale of all of the shares of Common
Stock issuable upon conversion of the Preferred Shares and exercise of the
Warrants issued pursuant to the Purchase Agreement (the “Period”),
the
Stockholders hereby agree with the Company that the Stockholders will not (i)
offer, sell, contract to sell, sell short, pledge, assign, transfer,
hypothecate, grant any option to purchase, grant a security interest in or
otherwise dispose of (collectively, a “Disposition”),
directly or indirectly, (A) any non-convertible shares of the Company's
preferred stock, $0.01 par value per share, or (B) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to
be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common
Stock
that may be issued upon the exercise of a stock option or warrant) or (C)
securities convertible into or exchangeable or exercisable for shares of Common
Stock or (D) any derivative with respect to shares of Common Stock or preferred
stock beneficially owned by the Stockholders (all of such shares and other
securities being referred to collectively hereinafter as the "Securities"),
(ii)
enter into any transactions that would have the same effect, (iii) enter into
any swap, hedge or other arrangement that transfers, in whole or in part, any
of
the economic consequences of ownership of the Securities, whether any of these
transactions are to be settled by delivery of the Securities or other
securities, in cash or otherwise, (iv) publicly disclose the intention to make
any Disposition, or enter into any transaction, swap, hedge or other
arrangement, or (v) request the registration of any of the foregoing under
the
Securities Act without, in each case, the prior written consent of investors
who
have purchased a majority of the Shares.
-1-
2. Ownership. During
the Period, the Stockholders shall retain all rights of ownership in the
Securities, including, without limitation, voting rights and the right to
receive dividends, if any, that may be declared in respect thereof.
4.Notices.
All
notices, demands, consents, requests, instructions and other communications
to
be given or delivered or permitted under or by reason of the provisions of
this
Agreement or in connection with the transactions contemplated hereby shall
be in
writing and shall
be
deemed to be delivered and received by the intended recipient as follows: (i)
if
personally
delivered, on the business day of such delivery (as evidenced by the receipt
of
the personal delivery service), (ii) if mailed certified or registered mail
return receipt requested, four (4) business days after being mailed, (iii)
if
delivered by overnight courier (with all charges having been prepaid), on the
business day of such delivery (as evidenced by the receipt of the overnight
courier service of recognized standing), or (iv) if delivered by facsimile
transmission, on the business day of such delivery if sent by 6:00 p.m. in
the
time zone of the recipient, or if sent after that time, on the next succeeding
business day (as evidenced by the printed confirmation of delivery generated
by
the sending party's telecopier machine). If any notice, demand, consent,
request, instruction or other communication cannot be delivered because of
a
changed address of which no notice was given (in accordance with this Section
4), or the refusal to accept same, the notice, demand, consent, request,
instruction or other communication shall be deemed received on the second
business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers
as
applicable.
If
to the
Company:
BPO
Management Services, Inc.
0000
X.
Xxxxxxx, Xxx 000
Xxxxxxx,
XX 00000
Attention:
Chief Executive Officer
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
E-mail:
xxxxxxx.xxxxx@xxxxx.xxx
With
copies to (which copies shall not constitute notice):
Xxxxx
Xxxx LLP
0000
Xxxx
Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxx, Esq.
Tel.
No.:
(000) 000-0000
-2-
Fax
No.:
(000) 000-0000
E-mail:
xxxxxx@xxxxxxxxx.xxx
and
to:
Xxxxxxx
& Xxxxxx
00000
XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxxxx, Esq.
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
E-mail:
xxxxxxxx@xxxxxxxxxxxxx.xxx
and
to:
Sheppard,
Mullin, Xxxxxxx & Hampton LLP
000
X.
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxx X. Xxxxxx, Esq.
Tel
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
E-mail:
xxxxxxx@xxxxxxxxxxxxxx.xxx
If
to any
of the Stockholders, addressed to such Stockholder at:
c/o
BPO
Management Services, Inc.
0000
X.
Xxxxxxx, Xxx 000
Xxxxxxx,
XX 00000
Attention:
Chief Executive Officer
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
E-mail:
xxxxxxx.xxxxx@xxxxx.xxx
With
copies to (which copies shall not constitute notice):
Xxxxx
Xxxx LLP
0000
Xxxx
Xxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxx, Esq.
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
E-mail:
xxxxxx@xxxxxxxxx.xxx
-3-
Any
party
hereto may from time to time change its address for notices by giving at least
ten (10) days’ written notice of such changed address to the other party
hereto.
5.Entire
Agreement.
This
Agreement
contains
the entire understanding and agreement of the parties relating to the subject
matter hereof and supersedes all prior and/or contemporaneous understandings
and
agreements of any kind and nature (whether written or oral) among the parties
with respect to such subject matter, all of which are merged
herein.
6.Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York applicable to agreements made and to be performed in that
state, without regard to any of its principles of conflicts
of laws or other laws which would result in the application of the laws of
another jurisdiction. This Agreement shall be construed and interpreted without
regard to any presumption against the party causing this Agreement to be
drafted.
7.Waiver
of Jury Trial.
EACH OF
THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES
UNCONDITIONALLY AND IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND THE
FEDERAL DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
OBJECTION TO VENUE IN NEW YORK COUNTY OR SUCH DISTRICT, AND AGREES THAT SERVICE
OF ANY SUMMONS, COMPLAINT, NOTICE OR OTHER PROCESS RELATING TO SUCH SUIT, ACTION
OR OTHER PROCEEDING MAY BE EFFECTED IN THE MANNER PROVIDED IN SECTION 4.
8.Severability.
The
parties agree that if any provision of this Agreement be held to be invalid,
illegal or unenforceable in any jurisdiction, that holding shall be effective
only to the extent of such invalidity, illegally or unenforceability without
invalidating or rendering illegal or unenforceable the
remaining provisions hereof, and any such invalidity, illegally or
unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. It is the intent of the parties that this Agreement be fully
enforced to the fullest extent permitted by applicable law.
9.Binding
Effect; Assignment.
This
Agreement and the rights and obligations hereunder may not be assigned by any
party hereto without the prior written consent of the other parties hereby.
This
Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and
their respective successors and permitted assigns.
-4-
purposes
only and shall not affect in any way the meaning, construction or interpretation
of this Agreement. Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate. References to
the
singular shall include the plural and vice versa.
11.Counterparts.
This
Agreement may be executed in two or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be
deemed to be an original, and all of which, when taken together,
shall constitute
one and the same document. This Agreement shall become effective when one or
more counterparts, taken together, shall have been executed and delivered by
all
of the parties.
12.Third-Party
Beneficiaries.
Each of
the Stockholders and the Company hereby acknowledges that the Investors are
third party beneficiaries of this Agreement and this Agreement may not be
modified or changed without the prior written consent of the Investors.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-5-
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above herein.
BPO
MANAGEMENT SERVICES, INC.
By:
/s/ Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Chairman and CEO
-6-
STOCKHOLDER:
By:
/s/ Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Chairman and CEO
STOCKHOLDER:
By:
Xxx Xxxxxxx
Name:
Xxx
Xxxxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
By:
/s/ Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxx Xxxxxxx
Name:
Xxx
Xxxxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxx Xxxx
Name:
Xxx
Xxxx
Title:
STOCKHOLDER:
By: /s/
Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Title:
STOCKHOLDER:
WEST
LTP TRUST:
By:
/s/ Xxxxxxx Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Trustee
STOCKHOLDER:
By:
/s/ Xxx Xxxxx
Name:
Xxx
Xxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxx Xxxxx
Name:
Xxx
Xxxxx
Title:
By:
/s/ Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
By:
/s/ Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title:
STOCKHOLDER:
By: /s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
STOCKHOLDER:
By: /s/
Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxx Xxxxxxxxxx
Name:
Xxx
Xxxxxxxxxx
Title:
STOCKHOLDER:
By:
/s/ Xxxx Xxxxxxx
Name:
Xxxx Xxxxxxx
Title:
Schedule
A
Xxxxxxx
Xxxxx
Xxx
Xxxxxxx
Xxxxxx
Xxxxx
Xxxxx
Xxxxx
Xxxxx
Xxxxx
Xxx
Xxxxxxx
Xxx
Xxxx
Xxxxxx
Xxxx
West
LTP Trust
Xxx
Xxxxx
Xxx
Xxxxx
Xxxxxxx
Xxxxx
Xxxxx
Xxxxx
Xxxxx
Xxxxx
Xxxx
Xxxxx
Xxxxxx
Xxxxxxx
Houshik
Dutta
Xxx
Xxxxxxxxxx
Xxxx
Xxxxxxx
