bpo_8k-100407.htm

0001019687-07-003364.txt : 20071004 0001019687-07-003364.hdr.sgml : 20071004 20071004172322 ACCESSION NUMBER: 0001019687-07-003364 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20070928 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071004 DATE AS OF CHANGE: 20071004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BPO Management Services CENTRAL INDEX KEY: 0001015920 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 222356861 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28560 FILM NUMBER: 071157464 BUSINESS ADDRESS: STREET 1: 1290 N HANCOCK HILLS CITY: ANAHEIM HILLS STATE: CA ZIP: 92807 BUSINESS PHONE: 714-974-2670 MAIL ADDRESS: STREET 1: 1290 N HANCOCK HILLS CITY: ANAHEIM HILLS STATE: CA ZIP: 92807 FORMER COMPANY: FORMER CONFORMED NAME: RESEARCH ENGINEERS INC/ DATE OF NAME CHANGE: 20000317 FORMER COMPANY: FORMER CONFORMED NAME: NETGURU INC DATE OF NAME CHANGE: 20000308 FORMER COMPANY: FORMER CONFORMED NAME: RESEARCH ENGINEERS INC DATE OF NAME CHANGE: 19960603 8-K 1 bpo_8k-100407.htm CURRENT REPORT ON FORM 8-K bpo_8k-100407.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 28, 2007

BPO MANAGEMENT SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-28560	22-2356861
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1290 N. Hancock Street, Anaheim, California 92807

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (714) 974-2670

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS

ITEM 1.01 Entry into a Material Definitive Agreement.

Through amendments to each of our Series J Warrants to Purchase Shares of Preferred Stock (“Series J Warrants”) issued to the seven institutional investors who purchased shares of our Series D Convertible Preferred Stock on June 13, 2007 (which Series J Warrants were issued in connection with such share purchases), we voluntarily reduced the per-share warrant exercise price payable upon exercise by any such investor of its Series J Warrant from $14.40 to $9.60, effective only for exercises thereof during the period between September 28, 2007 and October 10, 2007 (the “Reduced Warrant Price Period”). This reduced warrant exercise price only applies for up to seventy-five percent (75%) of the Series J Warrants then held by each such institutional investor and the original exercise price of $14.40 per share will automatically re-apply to any Series J Warrants not exercised at the reduced price during the Reduced Warrant Price Period. These amendments were made because we determined that, in lieu of procuring mezzanine financing from otherwise unaffiliated third parties (as originally contemplated by these institutional investors and us as of June 13, 2007, the date on which we closed our Series D Convertible Preferred Stock private placement with such institutional investors) in order to finance our potential acquisition of a private entity providing data center outsourcing services to clients located throughout the United States for more than 10 years, we would provide an enhanced opportunity to obtain such financing from these seven institutional investors. Since we believe that we will be able to obtain the funds we need to complete this potential acquisition (if we determine to proceed with such acquisition) from the exercise of these Series J Warrants, we have agreed that we will not procure such mezzanine financing or any other financing which is not permitted by the terms of the Series D Convertible Preferred Stock Purchase Agreement dated as of June 13, 2007, entered into by these institutional investors and us.

We also amended each of our Series C Warrants to Purchase Shares of Common Stock (“Series C Warrants”) and Series D Warrants to Purchase Shares of Common Stock (“Series D Warrants”), all of which were also issued in connection with such purchases of our Series D Convertible Preferred Stock on June 13, 2007 to these seven institutional investors, to provide that, in the event that such institutional investor exercises any portion of the Series J Warrants during the Reduced Warrant Price Period, the per-share warrant exercise price payable upon exercise of its Series C Warrant is to be reduced from $1.35 to $0.01 and the per-share warrant exercise price payable upon exercise of its Series D Warrant is to be reduced from $1.87 to $1.10 for the same percentage of such investor’s Series C Warrants and Series D Warrants as the percentage as the percentage of Series J Warrants then exercised by such investor during the Reduced Warrant Price Period. For example, if an institutional investor exercises one-quarter (1/4) of its Series J Warrants during the Reduced Warrant Price Period, the per-share exercise price for its Series C Warrants and Series D Warrant will be so reduced for one-quarter (1/4) of its Series C Warrants and Series D Warrants. Any applicable reduced warrant exercise price for the Series C Warrants and Series D Warrants will apply for the remainder of their respective terms.

Each of the Series J Warrants, Series C Warrants, and Series D Warrants provides that such warrants may only be amended by written instruments signed by us and the holders of warrants exercisable for a majority of the shares of our stock underlying all of the then-outstanding Series J Warrants, Series C Warrants, and Series D Warrants, respectively. We have received the requisite approval for such amendments. The institutional investors have also been asked to confirm that these reductions to the warrant exercise prices of the Series J Warrants, Series C Warrants, and Series D Warrants do not trigger the anti-dilution protection set forth in such warrants or in any of the Series A Warrants or Series B Warrants issued to them in connection with their purchases of our Series D Convertible Preferred Stock on June 13, 2007.

As of the date of this Current Report, five institutional investors have exercised certain of their Series J Warrants at the reduced exercise price and acquired an aggregate of approximately 583,334 shares of our Series D-2 Convertible Preferred Stock for an aggregate of approximately $5.6 million.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description of Exhibit

10.46*		Form of Amendment to Series J Warrant to Purchase Shares of Preferred Stock of BPO Management Services, Inc.
10.47*		Form of Amendment to Series C Warrant to Purchase Shares of Common Stock of BPO Management Services, Inc.
10.48*		Form of Amendment to Series D Warrant to Purchase Shares of Common Stock of BPO Management Services, Inc.
99.1*		Press release, dated October 4, 2007

_______________

* filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 4, 2007	BPO MANAGEMENT SERVICES, INC.

	By:	/s/ James Cortens
		James Cortens
		President

Exhibit Index

Exhibit		Description of Exhibit

10.46		Form of Amendment to Series J Warrant to Purchase Shares of Preferred Stock of BPO Management Services, Inc.
10.47		Form of Amendment to Series C Warrant to Purchase Shares of Common Stock of BPO Management Services, Inc.
10.48		Form of Amendment to Series D Warrant to Purchase Shares of Common Stock of BPO Management Services, Inc.
99.1		Press release, dated October 4, 2007

EX-10.46 2 bpo_ex1046-100407.htm EXHIBIT 10.46 bpo_ex1046-100407.htm

Exhibit 10.46

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

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

RECITALS

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

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

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

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

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

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

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

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

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

ARTICLE 1

AMENDMENT

1. Amendment; Covenant.

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

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

ARTICLE 2

MISCELLANEOUS PROVISIONS

2. Miscellaneous Provisions.

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

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]

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

ISSUER:

BPO MANAGEMENT SERVICES, INC., a Delaware corporation

By: ______________________________ Name: Patrick A. Dolan Its: Chief Executive Officer


Amendment is acknowledged and consented to:
HOLDER:


By: ______________________________ Name: Its:

EX-10.47 3 bpo_ex1047-100407.htm EXHIBIT 10.47 bpo_ex1047-100407.htm

Exhibit 10.47

AMENDMENT TO SERIES C WARRANT TO PURCHASE SHARES OF COMMON STOCK OF BPO MANAGEMENT SERVICES, INC.

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

RECITALS

WHEREAS, Issuer 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, 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, pursuant to an Amendment to Series J Warrant to Purchase Shares of Preferred Stock of BPO Management Services, Inc. (the “Series J Warrant Amendment”);

WHEREAS, Section 11 of the Series C Warrant requires that the Series C 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 Common Stock of Issuer issuable upon exercise of the then-outstanding Series C Warrants issued to Holder and the Other Warrant Holders (the “Majority Holders”);

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

ARTICLE 1

AMENDMENT

1. Amendment to Series C Warrant. For purposes of this Amendment, “Amendment Eligible Shares” shall mean that number of shares calculated pursuant to the product of (a) the percentage of the Series J Covered Shares actually exercised by Holder during the period commencing on the date hereof and ending on October 10, 2007 multiplied by (b) the number of Series C Covered Shares. Effective solely for any exercise by Holder of up to one hundred percent (100%) of the Amendment Eligible Shares (collectively, the “Amended Warrant Price Shares”) occurring during the remainder of the term of the Series C Warrant, the “Warrant Price” specified in Section 9 of the Series C Warrant shall be $0.01 per share of such Covered Shares.

ARTICLE 2

MISCELLANEOUS PROVISIONS

2. Miscellaneous Provisions.

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

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 C 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]

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

ISSUER:

BPO MANAGEMENT SERVICES, INC., a Delaware corporation

By: ______________________________ Name: Patrick A. Dolan Its: Chief Executive Officer


Amendment is acknowledged and consented to:
HOLDER:


By: ______________________________ Name: Its:

EX-10.48 4 bpo_ex1048-100407.htm EXHIBIT 10.48 bpo_ex1048-100407.htm

Exhibit 10.48

AMENDMENT TO SERIES D WARRANT TO PURCHASE SHARES OF COMMON STOCK OF BPO MANAGEMENT SERVICES, INC.

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

RECITALS

WHEREAS, Issuer 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, 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, pursuant to an Amendment to Series J Warrant to Purchase Shares of Preferred Stock of BPO Management Services, Inc. (the “Series J Warrant Amendment”);

WHEREAS, Section 11 of the Series D Warrant requires that the Series D 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 Common Stock of Issuer issuable upon exercise of the then-outstanding Series D Warrants issued to Holder and the Other Warrant Holders (the “Majority Holders”);

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

ARTICLE 1

AMENDMENT

1. Amendment to Series D Warrant. For purposes of this Amendment, “Amendment Eligible Shares” shall mean that number of shares calculated pursuant to the product of (a) the percentage of the Series J Covered Shares actually exercised by Holder during the period commencing on the date hereof and ending on October 10, 2007 multiplied by (b) the number of Series D Covered Shares. Effective solely for any exercise by Holder of up to one hundred percent (100%) of the Amendment Eligible Shares (collectively, the “Amended Warrant Price Shares”) occurring during the remainder of the term of the Series D Warrant, the “Warrant Price” specified in Section 9 of the Series D Warrant shall be $1.10 per share of such Covered Shares.

ARTICLE 2

MISCELLANEOUS PROVISIONS

2. Miscellaneous Provisions.

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

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 D 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]

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

ISSUER:

BPO MANAGEMENT SERVICES, INC., a Delaware corporation

By: ______________________________ Name: Patrick A. Dolan Its: Chief Executive Officer


Amendment is acknowledged and consented to:
HOLDER:


By: ______________________________ Name: Its:

EX-99.1 5 bpo_ex9901.htm EXHIBIT 99.1 bpo_ex9901.htm

Exhibit 99.1

CONTACT:

Marie Dagresto

MKR Group, Inc.

bpom@mkr-group.com

323.468.2300

Patrick Dolan

Chairman & CEO

714.612.6726

BPO MANAGEMENT SERVICES PROPOSES TO ACQUIRE PRIVATELY-HELD DATA CENTER OUTSOURCING SERVICES COMPANY FOCUSED ON MIDDLE-MARKET SPACE

Proposed Acquisition Represents its Third Acquisition; Company Completed Acquisitions of DocuCom and HRMS in June

Anaheim, Calif., October 4, 2007 - BPO Management Services, Inc., (OTCBB:BPOM) “BPOMS”, a full-service business process outsourcing company focused on serving middle-market enterprises, today announced that it proposes to acquire an unnamed privately-held data center outsourcing services company, pending the successful completion of its associated capital raise and satisfactory completion of definitive agreements with the parties. The closing date of the proposed acquisition is anticipated to occur within 30 days.

The target acquisition company, based in the northeastern U.S., is a full service data center outsourcing provider with customers located throughout the country representing a wide range of industries. This growing and profitable company has been recognized by industry analysts as a quality provider of data center outsourcing services for middle-market enterprises. Core services include enterprise-scale mainframe/server hosting, wide-area network management and dedicated business recovery solutions provided under long-term, recurring revenue based contracts. Services are delivered from its Class A, SAS70 Type II audited data center facility encompassing important support and high-availability features such as redundant feeds to utility power and telecom grids, virtually unlimited fiber-based telecom bandwidth, stand-alone back-up power generation and state of the art security and environmental controls. The facility and 24*7 data center operation are fully compliant with supporting its customers’ Sarbanes-Oxley and HIPAA requirements.

BPOMS intends to consolidate the operations of its existing Information Technology Outsourcing (ITO) business unit with the operations of the proposed acquisition to create additional capability for both new and existing customers and generate additional economic efficiencies. Additionally, the SAS70 Type II data center facility will allow BPOMS to expand its IT outsourcing footprint with existing customers as well as enable it to target new and larger enterprises, yielding important future growth opportunities with significantly larger contract values.

In an effort to raise the necessary funds required to complete the proposed acquisition, BPOMS recently offered the holders of its existing Series J Warrants a short-term discounted warrant exercise price. In the event of exercise during this reduced exercise price period, the holder will also be entitled to discounted warrant exercise prices for its Series C and D Warrants. The Company expects to raise approximately $7 million in acquisition financing through the exercise of certain of these warrants. To date, the Company has received approximately $5.6 million from the exercise of these warrants and anticipates receipt of the additional funds shortly. Details of the Company’s amendments effectuating these warrant exercise price discounts are included in its Form 8-K filed today with the Securities and Exchange Commission.

BPOMS Chief Executive Officer Patrick Dolan stated, "I am extremely excited to announce the proposed third acquisition- each expanding both our solutions platform and our footprint in mid-sized enterprises throughout North America. We are tracking to our expectations to grow the company into the market leader position as the premier BPO service provider to the underserved middle market and this is certainly an important milestone towards achieving our stated business objectives. We expect to be announcing more exciting news related to this acquisition in the very near future, as well as recent customer wins that will showcase our market success to date.”

About BPO Management Services, Inc.

BPO Management Services (BPOMS) is a business process outsourcing (BPO) provider that offers a diversified range of on-demand services, including human resources, information technology, enterprise content management, and finance and accounting, to support the back-office business functions of middle-market enterprises on an outsourced basis. BPOMS supports middle-market businesses new to the BPO market, established businesses that already outsource, and businesses seeking to maximize return-on-investment from their in-house workforce. For more information, please visit www.bpoms.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

With the exception of historical or factual information, the matters discussed in this press release, including without limitation the completion of the proposed acquisition, obtaining additional financing for this acquisition, future business prospects and the ability of the Company’s common stock to trade or be quoted on various markets are forward-looking statements that involve risks and uncertainties. Actual results may differ. Factors that could cause or contribute to such differences in results include, but are not limited to, fulfillment of conditions to conclude the proposed acquisition, including without limitation, the availability of financing; changes in market and business conditions and the conditions of the parties to the proposed transactions; and other risks and factors detailed from time to time in the Company’s public statements and its periodic reports and other filings with the U.S. Securities and Exchange Commission.

# # #

GRAPHIC 6 logo.jpg LOGO begin 644 logo.jpg M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+ M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$! M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$" M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#W^OFEK34? M#VNWESHOC72(97G9GCCNV7)W=&#+M./>O=3XLMPX_.OG^:ZTU]4 MN9-.TE8K<7!5[N[Q/-)(6^[&O^K!YXX.!R33P]:$[\K,,3!QMG1V>J0-YDD5JRM;7B]'V%7R-+T#Q=:VSDVMQ/:"WY/*% MFD7\EKW7PG<:6+.TL;.P`$D(+2D*=^.?;TKSCX@V&F:?XM,$-J;A04N M5TV&/<9I=H5%('(C&"2>^[:.^-:5>-3X>AG4H.$;L[_X3Z2='\"VL,N!S5V7POM-5M MM!OIM;9?[0N[YYY5\Q6925488#A3Q]WL,=.E<-\)KS7;6UUL:/I%M?*UV-[3 M7?D[#@XXVG/Z4;\UBM$X+IJ:7CRVU/X=1V6N:#K>H/;O.(IK*\N6FC;@D8W< M]B/6H?%,T^L?%[0]-:]O[:QO;.-I(K>Y:,\B1NQZ\#MVIVO:A)>>);`?$>UE MTS3(9M]G#;KYMM*_',D@.3CTVCC/O47B^^2T^.>@W:0S72):HRQVJ>8[@B3[ MH'7K^0JHK[[,4K:VVNCL+SX=;+9WTCQ'KMI>@$Q2/?/(I/HRGJ*YSPW\5+B' MP'JE[K2K/J6FRBW4CC[0[9V9QP.0U\/^%=5%[*-JSW\2 MP119_B.6R<>E>:ZKX-;PN_A'1;VX2XN-1U7[1>L`2K$%%"@GD@!FY(Y+'I4Q M5U9CE[KO`]'T?P?-KNGQZAXRN)[Z\N0)#8^:R6UN#R%$8(R0,9+9Y'XF/7?# MMWX5T^36/"$\T!M099M,>1I+>=!RP"DG8V,G*X]*[T'(!ILBJ\3H_P!U@0<^ ME9\[-G!6\S-\.Z[:^)=`M-7M,B*X3.PG)1@<,I]P016I7FWP3)'@Z_B_@AU. M9$_W=J'^9->DT25G8*;>N!S^9/;K^7D=].MSXEN(;10+33 M(9W3'.YU4EG/J2V.>O`KUL]20`1@]<=1GKZ?>Y_^OQSL/@G1[:XNIU>X+7*2 M1.7<$8?J<^N/Y_6O%P->G1YG/KL=.)I2J>#4=]JZ/?S6VM:GX@TBZ9R9XUAC;D^I4H2.O8]J[33_ M`(?^'IH3IUW]J6R5FG9_-^>(A>3G'0@?4;6W0[!> MJ6>W5>"%8*&`&1QGC(Z9KV:%>E-.4%I M,7DG@\HA]J\8R>,8YK%^!G_'EX@_Z_!_(UV7AFQ\/>&+2XT_1Y9?)+M.5.Z3 M!PN=IQSP5X&>M86G>$/#VD>76IWT8W1W-_*\WEC@Y7C:,!E/MD=* MGU#2_#5WXNM?$\]]-]NLUV(L9)3:`_)`4DC[_(XXHC/E5@E!R?-Z'9UY[\6M M*NY]%L->E1 MMK>F,?+^TJY8E-H4MG[P/0=/E;/T-0FT[FTDI*Q)I.J6NMZ5;:E92"2WN$#H M?3V/N.AK,\:>(8/#7A>\O9)%$Y0QVR9YDE(PH`[\\_05C?\`"-Z19WK3Z%K- M]HXN#YLD=G(K12,=N,1.K#)WK]T#J*DM-"\/PZM%J&J:G1[?>/3_)H_X1[31@_,:**Q]A2_E7W(OF? M<_DC;MB_N[0H3![$ M;!SW[T44Q63+C:+8N'#1$[]V[YB.H4']$44U="L%A\D1$1#>%0,<*&!!`]L$ M_G110.Q(^D6CV,EFR,8)'+LI.)&'ENTB#<<*6SG'M\QXH MHH%9##H=ALB41%?*SY9#'*DL&R/Q44KZ+9NLRL'(GYD!.=QP`3SZ@#-%%`61 1>1%C144850`![4ZBB@9__]D_ ` end