AMENDMENT TO SERIES J WARRANT TO PURCHASE SHARES OF PREFERRED STOCK OF BPO MANAGEMENT SERVICES, INC.
Exhibit
10.46
AMENDMENT
TO SERIES J WARRANT TO PURCHASE SHARES OF PREFERRED STOCK OF BPO MANAGEMENT
SERVICES, INC.
This
Amendment to Series J Warrant to Purchase Shares of Preferred Stock of BPO
Management Services, Inc. (this “Amendment”) is effective as of
September __, 2007, by BPO Management Services, Inc., a Delaware corporation
(“Issuer”), in favor of ____________________
(“Holder”). Issuer and Xxxxxx are, together, the
“Parties.”
RECITALS
WHEREAS,
Issuer previously granted to Holder that certain Series J Warrant to Purchase
Shares of Preferred Stock of Issuer, which was numbered X-X-07-__, was dated
and
issued June 13, 2007 (the “Series J Warrant”), and
entitled Holder to exercise the Series J Warrant in accordance with the terms
contained therein for the purchase of up to ___________ shares of Issuer’s
Series D-2 Convertible Preferred Stock (the “Series J Covered
Shares”) at an initial per-share Warrant Price (as defined in Section 9
of the Series J Warrant) of $14.40 (the “Series J Original Warrant
Price”);
WHEREAS,
Issuer also previously granted to Holder (a) that certain Series A Warrant
to
Purchase Shares of Common Stock of Issuer, which was numbered W-A-07-__,
was
dated and issued June 13, 2007 (the “Series A Warrant”),
and entitled Holder to exercise the Series A Warrant in accordance with the
terms contained therein for the purchase of up to ________ shares of Issuer’s
Common Stock at an initial per-share Warrant Price (as defined in Section
9 of
the Series A Warrant) of $0.90; (b) that certain Series B Warrant to Purchase
Shares of Common Stock of Issuer, which was numbered W-B-07-__, was dated
and
issued June 13, 2007 (the “Series B Warrant”), and
entitled Holder to exercise the Series B Warrant in accordance with the terms
contained therein for the purchase of up to ___________ shares of Issuer’s
Common Stock at an initial per-share Warrant Price (as defined in Section
9 of
the Series B Warrant) of $1.25; (c) that certain Series C Warrant to Purchase
Shares of Common Stock of Issuer, which was numbered W-C-07-__, was dated
and
issued June 13, 2007 (the “Series C Warrant”), and
entitled Holder to exercise the Series C Warrant in accordance with the terms
contained therein for the purchase of up to ___________ shares of Issuer’s
Common Stock (the “Series C Covered Shares”) at an initial
per-share Warrant Price (as defined in Section 9 of the Series C Warrant)
of
$1.35 (the “Series C Original Warrant Price”); and (d) that
certain Series D Warrant to Purchase Shares of Common Stock of Issuer, which
was
numbered W-D-07-__, was dated and issued June 13, 2007 (the “Series
D Warrant” and together with the Series J Warrant, the Series A
Warrant, the Series B Warrant, and the Series C Warrant, the
“Warrants”), and entitled Holder to exercise the Series D
Warrant in accordance with the terms contained therein for the purchase of
up to
___________ shares of Issuer’s Common Stock (the “Series D Covered
Shares”) at an initial per-share Warrant Price (as defined in Section 9
of the Series D Warrant) of $1.87 (the “Series D Original Warrant
Price”);
WHEREAS,
Issuer has determined that, in lieu of procuring mezzanine level financing
from
otherwise unaffiliated third parties (as originally contemplated by such
parties) in order to finance the potential acquisition by Issuer of a private
entity providing data center outsourcing services to clients located throughout
the United States for more than 10 years (the “Potential
Acquisition”), it will provide an enhanced opportunity to obtain such
financing from Holder and certain other parties who received warrants at
the
same time and on the same terms as the Warrants (the “Other Warrant
Holders”), by offering a reduction to the Series J Original Warrant
Price for up to 75% of the Series J Covered Shares, which reduction shall
be
available until October 10, 2007;
WHEREAS,
Issuer has agreed that, since it believes it will be able to obtain the funds
it
needs to complete the Potential Acquisition (if Issuer determines to proceed
with such Potential Acquisition) from the exercise of Series J Warrants held
by
Holder and Other Warrant Holders, it has concluded that it will not need
to and,
therefore, will not enter into, create, incur, assume, guarantee or suffer
to
exist any Indebtedness (as defined in that certain Series D Convertible
Preferred Stock Purchase Agreement dated as of June 13, 2007, among Issuer,
Holder and Other Warrant Holders (the “Purchase Agreement”)),
except as listed on Schedule 2.1(k) to the Purchase Agreement;
WHEREAS,
in furtherance of the foregoing, Issuer has also determined that, in the
event
that Holder exercises any portion of the Series J Covered Shares affected
by
such reduction to the Series J Original Warrant Price, the Series C Original
Warrant Price and Series D Original Warrant Price shall be reduced by amendments
to the Series C Warrant and the Series D Warrant effective for the
remainder of the term of the Series C Warrant and the Series D Warrant,
respectively, to $0.01 per share and $1.10 per share, respectively, for the
same
percentage of the Series C Covered Shares and Series D Covered Shares as
the
percentage of such Series J Covered Shares exercised between the date hereof
and
October 10, 2007 (i.e., if Holder exercises one-quarter (1/4) of the
Series J Covered Shares during said period, the Series C Original Warrant
Price
and the Series D Original Warrant Price shall be reduced as described herein
for
one-quarter (1/4) of the Series C Covered Shares and Series D Covered
Shares);
WHEREAS,
Section 11 of the Series J Warrant requires that the Series J Warrant may
only
be amended by written instrument(s) executed by Issuer and the holders of
warrants exercisable for a majority of the shares of Series D-2 Convertible
Preferred Stock of Issuer issuable upon exercise of the then-outstanding
Series
J Warrants issued to Holder and the Other Warrant Holders (the “Majority
Holders”);
WHEREAS,
Issuer shall be deemed to have obtained the signature of the Majority Holders
upon its receipt of signed acknowledgements to this Amendment and/or the
amendments provided to the Other Warrant Holders representing the requisite
number of covered shares and, if Holder has not provided its signed
acknowledgement to this Amendment by the time Issuer has obtained the written
consent of the Majority Holders, Xxxxxx’s signature shall only be required to
evidence its agreement that this Amendment and the other amendments referenced
herein do not trigger the anti-dilution protection set forth in the Warrants;
and
WHEREAS,
the Parties desire to amend the Series J Warrant to memorialize this
understanding and to execute amendments to the Series C Warrant and the Series
D
Warrant (in form and substance which is substantially similar to this
Amendment).
NOW,
THEREFORE, in consideration of the promises and covenants made herein, and
for
such other good and valuable consideration, the receipt and sufficiency of
which
are hereby acknowledged, the Parties hereby agree as follows:
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ARTICLE
1
AMENDMENT
1. Amendment;
Covenant.
1.1 Amendment
to Series J Warrant. Effective solely for any exercise by Holder
of up to seventy-five percent (75%) of the Series J Covered Shares
(i.e., up to ________ shares of Issuer’s Series D-2 Convertible
Preferred Stock) (collectively, the “Amended Warrant Price
Shares”) occurring during the period commencing on the date hereof and
ending on October 10, 2007 (the “Amendment Effective Period”),
the “Warrant Price” specified in Section 9 of the Series J Warrant shall be
$9.60 per share of such Covered Shares. With respect to those Amended
Warrant Price Shares that were not purchased through the exercise of the
Series
J Warrant during the Amendment Effective Period, immediately upon expiration
thereof and without any further act of the Parties, the Series J Original
Warrant Price shall be reinstated to such unpurchased Amended Warrant Price
Shares and thereafter apply to all Series J Covered Shares and this Amendment
shall be of no further force and effect. Issuer hereby represents
that, concurrently with the delivery of this Amendment to Holder, it is
delivering to each of the Other Warrant Holders an amendment to its respective
outstanding Series J Warrant for its consideration and acceptance, which
amendment is identical to this Amendment in form and
substance. Accordingly, the Parties agree that any exercise of the
Warrants held by the Other Warrant Holders at the prices contained herein
shall
not be deemed to trigger, or give rise to the triggering of, any anti-dilution
protection contained in the Warrants.
1.2 Covenant. Issuer
hereby covenants and agrees that, since it believes it will be able to obtain
the funds it needs to complete the Potential Acquisition (if Issuer determines
to proceed with such Potential Acquisition) from the exercise of Series J
Warrants held by Holder and Other Warrant Holders, it will not enter into,
create, incur, assume, guarantee or suffer to exist any Indebtedness (as
defined
in the Purchase Agreement), except as listed on Schedule 2.1(k) to the Purchase
Agreement.
ARTICLE
2
MISCELLANEOUS
PROVISIONS
2. Miscellaneous
Provisions.
2.1 No
Further Amendments. Except as amended by this Amendment, the
Series J Warrant remains unmodified and in full force and effect. In
the event of any inconsistency between the provisions of the Series J Warrant
and the provisions of this Amendment, the provisions of this Amendment shall
prevail. This Amendment
may only be modified or amended by a written agreement executed by Issuer,
and
consented to by Xxxxxx, with the same formalities and in the same manner
as this
Amendment.
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2.2 Counterparts. This
Amendment may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which when taken together shall constitute
one and
the same instrument. Facsimiles or portable document files
transmitted by e-mail containing original signatures shall be deemed for
all
purposes to be originally signed copies of the documents which are the subject
of such facsimiles or files.
2.3 Binding
on Successors. This
Amendment shall be binding upon and
shall inure to the benefit of the successors and permitted assigns of the
Parties.
2.4 Entire
Agreement. The
Series J Warrant as amended by this
Amendment contains the entire understanding between the Parties and supersedes
any prior written or oral agreements between them respecting the subject
matter
contained herein. There are no representations, agreements,
arrangements or understandings, oral or written, between the Parties relating
to
the subject matter hereof that are not fully expressed
herein.
[SIGNATURE
PAGE TO FOLLOW]
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IN
WITNESS WHEREOF, the Parties hereto have executed or have caused a duly
authorized officer to execute this Amendment all effective as of the day
and
year first above written.
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ISSUER:
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BPO
MANAGEMENT SERVICES, INC.,
a
Delaware corporation
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By: ______________________________
Name:
Xxxxxxx X. Xxxxx
Its: Chief
Executive Officer
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Amendment
is acknowledged and consented to:
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HOLDER:
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By: ______________________________
Name:
Its:
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