EXHIBIT
      4.2

     

    [FORM
      OF WARRANT]

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
      TO
      THE HOLDER, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
      IS
      NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
      144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
      PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
      ARRANGEMENT SECURED BY THE SECURITIES.

     

    WORKSTREAM
      INC.

     

    Warrant
      To Purchase Common Shares

     

    Warrant
      No.:    

    Date
      of
      Issuance: _________, 2007 (“Issuance
      Date”)

     

    Workstream
      Inc., a
      corporation existing pursuant to the Canada Business Corporations Act
(the
      “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, [MAGNETAR CAPITAL MASTER FUND,
      LTD] [OTHER BUYERS], the registered holder hereof or its permitted assigns
      (the
“Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company,
      at
      the Exercise Price (as defined below) then in effect, upon exercise of this
      Warrant to Purchase Common Shares (including any Warrants to Purchase Common
      Shares issued in exchange, transfer or replacement hereof, the “Warrant”),
      at
      any time or times on or after the Issuance Date, but not after 11:59 p.m.,
      Chicago time, on the Expiration Date (as defined below), ______________ (subject
      to adjustment as provided herein) fully paid and nonassessable Common Shares
      (as
      defined below) (the
      “Warrant
      Shares”).
      Except as otherwise defined herein, capitalized terms in this Warrant shall
      have
      the meanings set forth in Section 16.
      This
      Warrant is one of the Warrants to purchase Common Shares (the “Transaction
      Agreement Warrants”)
      issued
      pursuant to Section 1 of that certain Transaction Agreement, dated as of July
      25, 2007, by and among the Company and the investors (the “Buyers”)
      referred to therein (the “Transaction
      Agreement”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              1.

            	
              EXERCISE
                OF WARRANT.

            


    

     

    (a) Mechanics
      of Exercise.
      Subject
      to the terms and conditions hereof (including, without limitation, the
      limitations set forth in Section 1(f)),
      this
      Warrant may be exercised by the Holder on any day on or after the Issuance
      Date,
      in whole or in part, by (i) delivery of a written notice, in the form
      attached hereto as Exhibit
      A
      (the
“Exercise
      Notice”),
      of
      the Holder’s election to exercise this Warrant and (ii) (A) payment to the
      Company of an amount equal to the then-applicable Exercise Price multiplied
      by
      the number of Warrant Shares as to which this Warrant is being exercised (the
      “Aggregate
      Exercise Price”)
      in
      cash or wire transfer of immediately available funds or (B) by notifying the
      Company that this Warrant is being exercised pursuant to a Cashless Exercise
      (as
      defined in Section 1(d)).
      The
      Holder shall not be required to deliver the original of this Warrant in order
      to
      effect an exercise hereunder. Execution and delivery of the Exercise Notice
      with
      respect to less than all of the Warrant Shares shall have the same effect as
      cancellation of the original of this Warrant and issuance of a new Warrant
      evidencing the right to purchase the remaining number of Warrant Shares.
      Execution and delivery of the Exercise Notice for all of the Warrant Shares
      shall have the same effect as cancellation of the original of this Warrant
      after
      delivery of the Warrant Shares in accordance with the terms hereof. On or before
      the second (2nd)
      Business Day following the date on which the Company has received each of the
      Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless
      Exercise) (the “Exercise
      Delivery Documents”),
      the
      Company shall transmit by facsimile an acknowledgment of confirmation of receipt
      of the Exercise Delivery Documents to the Holder and the Company’s transfer
      agent (the “Transfer
      Agent”).
      On or
      before the third (3rd)
      Business Day following the date on which the Company has received all of the
      Exercise Delivery Documents (the “Share
      Delivery Date”),
      the
      Company shall (X) provided that the Transfer Agent is participating in The
      Depository Trust Company (“DTC”)
      Fast
      Automated Securities Transfer Program, and the Holder has indicated on its
      Exercise Notice that it intends to immediately sell all or any portion of the
      Warrant Shares to be received upon such exercise
      pursuant to the registration statement covering the resale of such Warrant
      Shares and, to the extent applicable, in compliance with the prospectus delivery
      requirements of the 1933 Act (as defined in the Transaction
      Agreement),
      upon
      the request of the Holder, credit such aggregate number of Common Shares to
      which the Holder immediately intends to sell and is entitled pursuant to such
      exercise to the Holder’s or its designee’s balance account with DTC through its
      Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is
      not
      participating in the DTC Fast Automated Securities Transfer Program, issue
      and
      deliver to the Holder or, at Holder’s instruction pursuant to the Exercise
      Notice, Holder’s agent or designee, in each case, sent by reputable overnight
      courier to the address as specified in the Exercise Notice, a certificate,
      registered in the Company’s share register in the name of the Holder or its
      designee (as indicated in the Exercise Notice), for the number of Common Shares
      to which the Holder is entitled pursuant to such exercise. Upon delivery of
      the
      Exercise Delivery Documents, the Holder shall be deemed for all corporate
      purposes to have become the holder of record of the Warrant Shares with respect
      to which this Warrant has been exercised, irrespective of the date such Warrant
      Shares are credited to the Holder’s DTC account or the date of delivery of the
      certificates evidencing such Warrant Shares, as the case may be. If this Warrant
      is submitted in connection with any exercise pursuant to this Section
1(a)
      and the
      number of Warrant Shares represented by this Warrant submitted for exercise
      is
      greater than the number of Warrant Shares being acquired upon an exercise,
      then
      the Company shall as soon as practicable and in no event later than three (3)
      Business Days after any exercise and at its own expense, issue and deliver
      to
      the Holder (or its designee) a new Warrant (in accordance with Section
7(d))
      representing the right to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant, less the number of
      Warrant Shares with respect to which this Warrant is exercised. No fractional
      Common Shares are to be issued upon the exercise of this Warrant, but rather
      the
      number of Common Shares to be issued shall be rounded up to the nearest whole
      number. The Company shall pay any and all taxes which may be payable with
      respect to the issuance and delivery of Warrant Shares upon exercise of this
      Warrant. 


    
      
         

      

      
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    (b) Exercise
      Price.
      For
      purposes of this Warrant, “Exercise
      Price”
means
      $1.40, subject to adjustment as provided herein. 

     

    (c) Company’s
      Failure to Timely Deliver Securities.
      If the
      Company shall fail, for any reason or for no reason, to issue to the Holder
      within three (3) Business Days of receipt of the Exercise Delivery Documents,
      a
      certificate for the number of Common Shares to which the Holder is entitled
      and
      register such Common Shares on the Company’s share register or to credit the
      Holder’s balance account with DTC for such number of Common Shares to which the
      Holder is entitled upon the Holder’s exercise of this Warrant (as the case may
      be), then, in addition to all other remedies available to the Holder, the
      Company shall pay in cash to the Holder on each day after such third
      (3rd)
      Business Day that the issuance of such Common Shares is not timely effected
      an
      amount equal to 1.5% of the product of (A) the sum of the number of Common
      Shares not issued to the Holder on a timely basis and to which the Holder is
      entitled and (B) the VWAP of the Common Shares for the five (5) Trading Day
      period immediately preceding the last possible date which the Company could
      have
      issued such Common Shares to the Holder without violating Section 1(a).
      In
      addition to the foregoing, if within three (3) Trading Days after the Company’s
      receipt of the facsimile copy of an Exercise Notice, the Company shall fail
      to
      issue and deliver a certificate to the Holder and register such Common Shares
      on
      the Company’s share register or credit the Holder’s balance account with DTC for
      the number of Common Shares to which the Holder is entitled upon such Holder’s
      exercise hereunder (as the case may be), and if on or after such third
      (3rd)
      Trading
      Day the Holder purchases (in an open market transaction or otherwise) Common
      Shares to deliver in satisfaction of a sale by the Holder of Common Shares
      issuable upon such exercise that the Holder anticipated receiving from the
      Company (a “Buy-In”),
      then
      the Company shall, within three (3) Business Days after the Holder’s request and
      in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
      to the Holder’s total purchase price (including brokerage commissions, if any)
      for the Common Shares so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Common Shares) shall terminate and the Holder shall have no further right
      to such Common Shares or the portion of this Warrant representing such Common
      Shares, or (ii) promptly honor its obligation to deliver to the Holder a
      certificate or certificates representing such Common Shares or credit the
      Holder’s balance account with DTC for the number of Common Shares to which the
      Holder is entitled upon such Holder’s exercise hereunder (as the case may be)
      and pay cash to the Holder in an amount equal to the excess (if any) of the
      Buy-In Price over the product of (A) such number of Common Shares times (B)
      the
      VWAP of the Common Shares for the five (5) Trading Day period immediately
      preceding the date of the Exercise Notice.

     

    
      
         

      

      
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    (d) Cashless
      Exercise.
      Notwithstanding anything contained herein to the contrary (other than Section
      1(f)
      below),
      the Holder may, in its sole discretion, exercise this Warrant in whole or in
      part and, in lieu of making the cash payment otherwise contemplated to be made
      to the Company upon such exercise in payment of the Aggregate Exercise Price,
      elect instead to receive upon such exercise the “Net Number” of Common Shares
      determined according to the following formula (a “Cashless
      Exercise”):

     

    Net
      Number = (A
      x
      B) - (A x C)

     

    B

     

    For
      purposes of the foregoing formula:

     

    A=
      the
      total number of shares with respect to which this Warrant is then being
      exercised.

     

    B=
      the
      VWAP of the Common Shares for the five (5) Trading Day period immediately
      preceding the date of the Exercise Notice.

     

    C=
      the
      Exercise Price then in effect for the applicable Warrant Shares at the time
      of
      such exercise.


    (e) Disputes.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the number of Warrant Shares to be issued pursuant
      to
      the terms hereof, the Company shall promptly issue to the Holder the number
      of
      Warrant Shares that are not disputed and resolve such dispute in accordance
      with
      Section 13.

     

    (f) Limitations
      on Exercises. Notwithstanding
      anything to the contrary contained in this Warrant, this Warrant shall not
      be
      exercisable by the Holder hereof to the extent (but only to the extent) that,
      if
      exercisable by the Holder, the Holder or any of its affiliates would
      beneficially own in excess of  4.99% (the “Maximum
      Percentage”)
      of the
      outstanding Common Shares. To the extent the above limitation applies, the
      determination of whether this Warrant shall be exercisable (vis-à-vis other
      convertible, exercisable or exchangeable securities owned by the Holder) and
      of
      which warrants shall be exercisable (as among all warrants owned by the Holder)
      shall, subject to such Maximum Percentage limitation, be determined on the
      basis
      of the first submission to the Company for conversion, exercise or exchange
      (as
      the case may be). No prior inability to exercise this Warrant pursuant to this
      paragraph shall have any effect on the applicability of the provisions of this
      paragraph with respect to any subsequent determination of exercisability.
      For the purposes of this paragraph, beneficial ownership and all determinations
      and calculations (including, without limitation, with respect to calculations
      of
      percentage ownership) shall be determined by the Holder in accordance with
      Section 13(d) of the 1934 Act (as defined in the Transaction Agreement) and
      the
      rules and regulations promulgated thereunder. The provisions of this paragraph
      shall be implemented in a manner otherwise than in strict conformity with the
      terms of this paragraph to correct this paragraph (or any portion hereof) which
      may be defective or inconsistent with the intended Maximum Percentage beneficial
      ownership limitation herein contained or to make changes or supplements
      necessary or desirable to properly give effect to such Maximum Percentage
      limitation. The limitations contained in this paragraph shall apply to a
      successor Holder of this Warrant. The holders of Common Shares shall
      be third party beneficiaries of this paragraph and the Company may not waive
      this paragraph without the consent of holders of a majority of
      its Common Shares. For purposes of this Warrant, in determining the
      number of outstanding Common Shares, the Holder may rely on the number of
      outstanding Common Shares as reflected in (1) the Company’s most recent Form
      10-K or Form 10-KSB (as the case may be), Form 10-Q or Form 10-QSB (as the
      case
      may be), Current Report on Form 8-K or other public filing with the SEC (as
      the
      case may be), (2) a more recent public announcement by the Company or (3) any
      other notice by the Company or the Transfer Agent setting forth the number
      of
      Common Shares outstanding. For any reason at any time, upon the written or
      oral
      request of the Holder, the Company shall within one (1) Business Day confirm
      orally and in writing to the Holder the number of Common Shares then
      outstanding, including by virtue of any prior conversion or exercise of
      convertible or exercisable securities into Common Shares, including, without
      limitation, pursuant to this Warrant or securities issued pursuant to the
      Transaction Agreement. By written notice to the Company, the Holder may increase
      or decrease the Maximum Percentage to any other percentage not in excess of
      9.99% specified in such notice, provided that (i) any such increase will not
      be
      effective until the sixty-first (61st)
      day
      after such notice is delivered to the Company, and (ii) any such increase or
      decrease will apply only to the Holder and not to any other holder of
      Transaction Agreement Warrants.


    
      
         

      

      
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    (g) Insufficient
      Authorized Shares.
      The
      Company shall at all times keep reserved for issuance under this Warrant a
      number of Common Shares as shall be necessary to satisfy the Company’s
      obligation to issue Common Shares hereunder (without regard to any limitation
      otherwise contained herein with respect to the number of Common Shares that
      may
      be acquirable upon exercise of this Warrant). If, notwithstanding the foregoing,
      and not in limitation thereof, at any time while any of the Transaction
      Agreement Warrants remain outstanding the Company does not have a sufficient
      number of authorized and unreserved Common Shares to satisfy its obligation
      to
      reserve for issuance upon exercise of the Transaction Agreement Warrants at
      least a number of Common Shares equal to the maximum number of Common Shares
      as
      shall from time to time be necessary to effect the exercise of all of the
      Transaction Agreement Warrants then outstanding (the “Required
      Reserve Amount”)
      (an
“Authorized
      Share Failure”),
      then
      the Company shall immediately take all action necessary to increase the
      Company’s authorized Common Shares to an amount sufficient to allow the Company
      to reserve the Required Reserve Amount for all the Transaction Agreement
      Warrants then outstanding. Without limiting the generality of the foregoing
      sentence, as soon as practicable after the date of the occurrence of an
      Authorized Share Failure, but in no event later than sixty (60) days after
      the
      occurrence of such Authorized Share Failure, the Company shall hold a meeting
      of
      its shareholders for the approval of an increase in the number of authorized
      Common Shares. In connection with such meeting, the Company shall provide each
      shareholder with a proxy statement and shall use its best efforts to solicit
      its
      shareholders’ approval of such increase in authorized Common Shares and to cause
      its board of directors to recommend to the shareholders that they approve such
      proposal.

     

    2. ADJUSTMENT
      OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this Section
      2.

     

    (a) Stock
      Dividends and Splits.
      If the
      Company, at any time on or after the date of the Transaction Agreement, (i)
      pays
      a stock dividend on one or more classes of its then outstanding Common Shares
      or
      otherwise makes a distribution on any class of capital stock that is payable
      in
      Common Shares, (ii) subdivides (by any stock split, stock dividend,
      recapitalization or otherwise) one or more classes of its then outstanding
      Common Shares into a larger number of shares or (iii) combines (by combination,
      reverse stock split or otherwise) one or more classes of its then outstanding
      Common Shares into a smaller number of shares, then in each such case the
      Exercise Price shall be multiplied by a fraction of which the numerator shall
      be
      the number of Common Shares outstanding immediately before such event and of
      which the denominator shall be the number of Common Shares outstanding
      immediately after such event. Any adjustment made pursuant to clause (i) of
      this
      paragraph shall become effective immediately after the record date for the
      determination of shareholders entitled to receive such dividend or distribution,
      and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
      become effective immediately after the effective date of such subdivision or
      combination. If any event requiring an adjustment under this paragraph occurs
      during the period that an Exercise Price is calculated hereunder, then the
      calculation of such Exercise Price shall be adjusted appropriately to reflect
      such event.


    (b) Adjustment
      Upon Issuance of Common Shares.
      If and
      whenever on or after the date of the Transaction Agreement, the Company issues
      or sells, or in accordance with this Section 2
      is
      deemed to have issued or sold, any Common Shares (including the issuance or
      sale
      of Common Shares owned or held by or for the account of the Company, but
      excluding any Excluded Securities (as defined in the Transaction Agreement)),
      for a consideration per share (the “New
      Issuance Price”)
      less
      than a price (the “Applicable
      Price”)
      equal
      to the Exercise Price in effect immediately prior to such issue or sale or
      deemed issuance or sale (the foregoing a “Dilutive
      Issuance”),
      then
      immediately after such Dilutive Issuance, the Exercise Price then in effect
      shall be reduced to an amount equal to the New Issuance Price. For purposes
      of
      determining the adjusted Exercise Price under this Section 2(b),
      the
      following shall be applicable:

     

    (i) Issuance
      of Options.
      If the
      Company in any manner grants or sells any Options and the lowest price per
      share
      for which one Common Shares is issuable upon the exercise of any such Option
      or
      upon conversion, exercise or exchange of any Convertible Securities issuable
      upon exercise of any such Option is less than the Applicable Price, then such
      Common Share shall be deemed to be outstanding and to have been issued and
      sold
      by the Company at the time of the granting or sale of such Option for such
      price
      per share. For purposes of this Section 2(b)(i),
      the
“lowest price per share for which one Common Share is issuable upon the exercise
      of any such Options or upon conversion, exercise or exchange of any Convertible
      Securities issuable upon exercise of any such Option” shall be equal to the sum
      of the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to any one Common Share upon the granting or sale of the
      Option, upon exercise of the Option and upon conversion, exercise or exchange
      of
      any Convertible Security issuable upon exercise of such Option. Except as
      contemplated below, no further adjustment of the Exercise Price shall be made
      upon the actual issuance of such Common Shares or of such Convertible Securities
      upon the exercise of such Options or upon the actual issuance of such Common
      Shares upon conversion, exercise or exchange of such Convertible
      Securities.

     

    
      
         

      

      
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    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities and the lowest
      price per share for which one Common Share is issuable upon the conversion,
      exercise or exchange thereof is less than the Applicable Price, then such Common
      Share shall be deemed to be outstanding and to have been issued and sold by
      the
      Company at the time of the issuance or sale of such Convertible Securities
      for
      such price per share. For the purposes of this Section 2(b)(ii),
      the
“lowest price per share for which one Common Share is issuable upon the
      conversion, exercise or exchange thereof” shall be equal to the sum of the
      lowest amounts of consideration (if any) received or receivable by the Company
      with respect to one Common Share upon the issuance or sale of the Convertible
      Security and upon conversion, exercise or exchange of such Convertible Security.
      Except as contemplated below, no further adjustment of the Exercise Price shall
      be made upon the actual issuance of such Common Shares upon conversion, exercise
      or exchange of such Convertible Securities, and if any such issue or sale of
      such Convertible Securities is made upon exercise of any Options for which
      adjustment of this Warrant has been or is to be made pursuant to other
      provisions of this Section 2(b),
      except
      as contemplated below, no further adjustment of the Exercise Price shall be
      made
      by reason of such issue or sale. 


    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase or exercise price provided for in any Options, the additional
      consideration, if any, payable upon the issue, conversion, exercise or exchange
      of any Convertible Securities, or the rate at which any Convertible Securities
      are convertible into or exercisable or exchangeable for Common Shares increases
      or decreases at any time, the Exercise Price in effect at the time of such
      increase or decrease shall be adjusted to the Exercise Price which would have
      been in effect at such time had such Options or Convertible Securities provided
      for such increased or decreased purchase price, additional consideration or
      increased or decreased conversion rate, as the case may be, at the time
      initially granted, issued or sold. For purposes of this Section 2(b)(iii),
      if the
      terms of any Option or Convertible Security that was outstanding as of the
      date
      of issuance of this Warrant are increased or decreased in the manner described
      in the immediately preceding sentence, then such Option or Convertible Security
      and the Common Shares deemed issuable upon exercise, conversion or exchange
      thereof shall be deemed to have been issued as of the date of such increase
      or
      decrease. No adjustment pursuant to this Section 2(b)
      shall be
      made if such adjustment would result in an increase of the Exercise Price then
      in effect.

     

    (iv) Calculation
      of Consideration Received.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $0.01. If any Common
      Shares, Options or Convertible Securities are issued or sold or deemed to have
      been issued or sold for cash, the consideration received therefor will be deemed
      to be the net amount received by the Company therefor. If any Common Shares,
      Options or Convertible Securities are issued or sold for a consideration other
      than cash, the amount of such consideration received by the Company will be
      the
      fair value of such consideration, except where such consideration consists
      of
      securities, in which case the amount of consideration received by the Company
      for each such security will be the VWAP of such security for the five (5)
      Trading Day period immediately preceding the date of receipt. If any Common
      Shares, Options or Convertible Securities are issued to the owners of the
      non-surviving entity in connection with any merger in which the Company is
      the
      surviving entity, the amount of consideration therefor will be deemed to be
      the
      fair value of such portion of the net assets and business of the non-surviving
      entity as is attributable to such Common Shares, Options or Convertible
      Securities, as the case may be. The fair value of any consideration other than
      cash or securities will be determined jointly by the Company and the Holder.
      If
      such parties are unable to reach agreement within ten (10) days after the
      occurrence of an event requiring valuation (the “Valuation
      Event”),
      the
      fair value of such consideration will be determined within five (5) Trading
      Days
      after the tenth (10th)
      day
      following such Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Holder. The determination of such appraiser
      shall be final and binding upon all parties absent manifest error and the fees
      and expenses of such appraiser shall be borne by the Company.

     

    
      
         

      

      
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    (v) Record
      Date.
      If the
      Company takes a record of the holders of Common Shares for the purpose of
      entitling them (A) to receive a dividend or other distribution payable in
      Common Shares, Options or in Convertible Securities or (B) to subscribe for
      or purchase Common Shares, Options or Convertible Securities, then such record
      date will be deemed to be the date of the issue or sale of the Common Shares
      deemed to have been issued or sold upon the declaration of such dividend or
      the
      making of such other distribution or the date of the granting of such right
      of
      subscription or purchase (as the case may be).


    (vi) Floor
      Price.
      No
      adjustment pursuant to Section 2(b)
      shall
      cause the Exercise Price to be less than $1.21 (the “Floor
      Price”),
      as
      adjusted for any stock dividend, stock split, stock combination,
      reclassification or similar transaction. The Company shall not directly or
      indirectly issue or sell, or, in accordance with this Section 2,
      be
      deemed to have issued or sold, any Common Shares (other than Excluded
      Securities) for less than the Floor Price at any time while this Warrant is
      outstanding without the prior written consent of the Holder, which consent
      may
      be granted or withheld in the Holder’s sole discretion. In
      no
      event shall any Excluded Securities be issued, or be deemed to be issued as
      contemplated hereby, for less than the fair market value of the Common Shares
      at
      the time such Excluded Securities are so issued or are so deemed to be
      issued.

     

    (c) Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs
      (a) or (b) of this Section 2,
      the
      number of Warrant Shares that may be purchased upon exercise of this Warrant
      shall be increased or decreased proportionately, so that after such adjustment
      the aggregate Exercise Price payable hereunder for the adjusted number of
      Warrant Shares shall be the same as the aggregate Exercise Price in effect
      immediately prior to such adjustment (without regard to any limitations on
      exercise contained herein).

     

    
      
         

      

      
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    (d) Other
      Events.
      In the
      event that the Company (or any direct or indirect subsidiary thereof) shall
      take any action to which the provisions hereof are not strictly applicable,
      or,
      if applicable, would not operate to protect the Holder from dilution or if
      any
      event occurs of the type contemplated by the provisions of this Section
2
      but not
      expressly provided for by such provisions (including, without limitation, the
      granting of stock appreciation rights, phantom stock rights or other rights
      with
      equity features), then the Company’s Board of Directors shall in good faith
      determine and implement an appropriate adjustment in the Exercise Price and
      the
      number of Warrant Shares (if applicable) so as to protect the rights of the
      Holder; provided that no such adjustment pursuant to this Section 2(d)
      will
      increase the Exercise Price or decrease the number of Warrant Shares as
      otherwise determined pursuant to this Section 2,
      provided further that if the Holder does not accept such adjustments as
      appropriately protecting its interests hereunder against such dilution, then
      the
      Company’s Board of Directors and the Holder shall agree, in good faith, upon an
      independent investment bank of nationally recognized standing to make such
      appropriate adjustments, whose determination shall be final and binding and
      whose fees and expenses shall be borne by the Company.

     

    (e) Calculations.
      All
      calculations under this Section 2
      shall be
      made to the nearest cent or the nearest 1/100th
      of a
      share, as applicable. The number of Common Shares outstanding at any given
      time
      shall not include shares owned or held by or for the account of the Company,
      and
      the disposition of any such shares shall be considered an issue or sale of
      Common Shares.

     

    3. RIGHTS
      UPON DISTRIBUTION OF ASSETS.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Shares, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement, scheme of arrangement or other
      similar transaction) (a “Distribution”),
      at
      any time after the issuance of this Warrant, then, in each such case, the Holder
      shall be entitled to participate in such Distribution to the same extent that
      the Holder would have participated therein if the Holder had held the number
      of
      Common Shares acquirable upon complete exercise of this Warrant (without regard
      to any limitations on exercise hereof, including without limitation, the Maximum
      Percentage) immediately before the date on which a record is taken for such
      Distribution, or, if no such record is taken, the date as of which the record
      holders of Common Shares are to be determined for the participation in such
      Distribution (provided, however, that to the extent that the Holder’s right to
      participate in any such Distributions would result in the Holder exceeding
      the
      Maximum Percentage, then the Holder shall not be entitled to participate in
      such
      Distribution to such extent (or the beneficial ownership of any such Common
      Shares as a result of such Distribution to such extent) and such Distribution
      to
      such extent shall be held in abeyance for the benefit of the Holder until such
      time, if ever, as its right thereto would not result in the Holder exceeding
      the
      Maximum Percentage).


    
      	
              4.

            	
              PURCHASE
                RIGHTS; FUNDAMENTAL TRANSACTIONS.

            


    

     

    (a) Purchase
      Rights.
      In
      addition to any adjustments pursuant to Section 2
      above,
      if at any time the Company grants, issues or sells any Options, Convertible
      Securities or rights to purchase stock, warrants, securities or other property
      pro rata to all of the record holders of any class of Common Shares (the
“Purchase
      Rights”),
      then
      the Holder will be entitled to acquire, upon the terms applicable to such
      Purchase Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the number of Common Shares acquirable upon
      complete exercise of this Warrant (without regard to any limitations on exercise
      hereof, including without limitation, the Maximum Percentage) immediately before
      the date on which a record is taken for the grant, issuance or sale of such
      Purchase Rights, or, if no such record is taken, the date as of which the record
      holders of Common Shares are to be determined for the grant, issue or sale
      of
      such Purchase Rights (provided, however, that to the extent that the Holder’s
      right to participate in any such Purchase Right would result in the Holder
      exceeding the Maximum Percentage, then the Holder shall not be entitled to
      participate in such Purchase Right to such extent (or beneficial ownership
      of
      such Common Shares as a result of such Purchase Right to such extent) and such
      Purchase Right to such extent shall be held in abeyance for the Holder until
      such time, if ever, as its right thereto would not result in the Holder
      exceeding the Maximum Percentage).

     

    
      
         

      

      
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    (b) Fundamental
      Transactions.
      The
      Company shall not enter into or be party to a Fundamental Transaction unless
      the
      Successor Entity assumes in writing all of the obligations of the Company under
      this Warrant and the other Transaction Documents (as defined in the Transaction
      Agreement) in accordance with the provisions of this Section 4(b)
      pursuant
      to written agreements in form and substance reasonably satisfactory to the
      Holder and approved by the Holder prior to such Fundamental Transaction,
      including agreements to deliver to the Holder in exchange for this Warrant
      a
      security of the Successor Entity evidenced by a written instrument substantially
      similar in form and substance to this Warrant, including, without limitation,
      which is exercisable for a corresponding number of shares of capital stock
      equivalent to the Common Shares acquirable and receivable upon exercise of
      this
      Warrant (without regard to any limitations on the exercise of this Warrant)
      prior to such Fundamental Transaction, and with an exercise price which applies
      the exercise price hereunder to such shares of capital stock (but taking into
      account the relative value of the Common Shares pursuant to such Fundamental
      Transaction and the value of such shares of capital stock, such adjustments
      to
      the number of shares of capital stock and such exercise price being for the
      purpose of protecting the economic value of this Warrant immediately prior
      to
      the consummation of such Fundamental Transaction), and which is reasonably
      satisfactory in form and substance to the Holder. Upon the occurrence of any
      Fundamental Transaction, the Successor Entity shall succeed to, and be
      substituted for (so that from and after the date of such Fundamental
      Transaction, the provisions of this Warrant and the other Transaction Documents
      referring to the “Company” shall refer instead to the Successor Entity), and may
      exercise every right and power of the Company and shall assume all of the
      obligations of the Company under this Warrant and the other Transaction
      Documents with the same effect as if such Successor Entity had been named as
      the
      Company herein. Upon consummation of the Fundamental Transaction, the Successor
      Entity shall deliver to the Holder confirmation that there shall be issued
      upon
      exercise of this Warrant at
      any
      time after the consummation of the Fundamental Transaction, in lieu of the
      Common Shares (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) issuable
      upon the exercise of this Warrant
      prior
      to
      such Fundamental Transaction,
      such
      shares of the publicly traded Common Shares (or its equivalent) of the Successor
      Entity (including its Parent Entity) which the Holder would have been entitled
      to receive upon the happening of such Fundamental Transaction had this
Warrant
      been
      exercised immediately prior to such Fundamental Transaction (without
      regard to any limitations on the exercise of this Warrant),
      as
      adjusted in accordance with the provisions of this Warrant.
      In
      addition to and not in substitution for any other rights hereunder, prior to
      the
      consummation of any Fundamental Transaction pursuant to which holders of Common
      Shares are entitled to receive securities or other assets with respect to or
      in
      exchange for Common Shares (a “Corporate
      Event”),
      the
      Company shall make appropriate provision to insure that the Holder will
      thereafter have the right to receive upon an exercise of this Warrant
at
      any
      time after the consummation of
      the
      Fundamental Transaction but
      prior
      to the Expiration Date,
      in lieu
      of the Common Shares (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) issuable
      upon the exercise of the Warrant prior to such Fundamental
      Transaction,
      such
      shares of stock, securities, cash, assets or any other property whatsoever
      (including warrants or other purchase or subscription rights) which the Holder
      would have been entitled to receive upon the happening of such Fundamental
      Transaction had the Warrant been exercised immediately prior to such Fundamental
      Transaction (without
      regard to any limitations on the exercise of this Warrant).
      Provision
      made pursuant to the preceding sentence shall be in a form and substance
      reasonably satisfactory to the Holder. The provisions of this Section
4
      shall
      apply similarly and equally to successive Fundamental Transactions and Corporate
      Events and shall be applied as if this Warrant (and any such subsequent
      warrants) were fully exercisable and without regard to any limitations on the
      exercise of this Warrant (provided that the Holder shall continue to be entitled
      to the benefit of the Maximum Percentage, applied however with respect to shares
      of capital stock registered under the 1934 Act and thereafter receivable upon
      exercise of this Warrant (or any such other warrant)).

     

    
      
         

      

      
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    5. NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Articles of Incorporation, Bylaws or through any reorganization, transfer
      of
      assets, consolidation, merger, scheme of arrangement, dissolution, issue or
      sale
      of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, and will at
      all
      times in good faith carry out all the provisions of this Warrant and take all
      action as may be required to protect the rights of the Holder. Without limiting
      the generality of the foregoing, the Company (i) shall not increase the par
      value of any Common Shares receivable upon the exercise of this Warrant above
      the Exercise Price then in effect, (ii) shall take all such actions as may
      be necessary or appropriate in order that the Company may validly and legally
      issue fully paid and nonassessable Common Shares upon the exercise of this
      Warrant, and (iii) shall, so long as any of the Transaction Agreement Warrants
      are outstanding, take all action necessary to reserve and keep available out
      of
      its authorized and unissued Common Shares, solely for the purpose of effecting
      the exercise of the Transaction Agreement Warrants, the maximum number of Common
      Shares as shall from time to time be necessary to effect the exercise of the
      Transaction Agreement Warrants then outstanding (without regard to any
      limitations on exercise).


    6. WARRANT
      HOLDER NOT DEEMED A SHAREHOLDER.
      Except
      as otherwise specifically provided herein, the Holder, solely in such Person’s
      capacity as a holder of this Warrant, shall not be entitled to vote or receive
      dividends or be deemed the holder of share capital of the Company for any
      purpose, nor shall anything contained in this Warrant be construed to confer
      upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
      any of the rights of a shareholder of the Company or any right to vote, give
      or
      withhold consent to any corporate action (whether any reorganization, issue
      of
      stock, reclassification of stock, consolidation, merger, conveyance or
      otherwise), receive notice of meetings, receive dividends or subscription
      rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
      which such Person is then entitled to receive upon the due exercise of this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on the Holder to purchase any securities (upon exercise
      of this Warrant or otherwise) or as a shareholder of the Company, whether such
      liabilities are asserted by the Company or by creditors of the Company.
      Notwithstanding this Section 6,
      the
      Company shall provide the Holder with copies of the same notices and other
      information given to the shareholders of the Company generally,
      contemporaneously with the giving thereof to the shareholders.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    7. REISSUANCE
      OF WARRANTS.

     

    (a) Transfer
      of Warrant.
      If this
      Warrant is to be transferred, the Holder shall surrender this Warrant to the
      Company, whereupon the Company will forthwith issue and deliver upon the order
      of the Holder a new Warrant (in accordance with Section 7(d)),
      registered as the Holder may request, representing the right to purchase the
      number of Warrant Shares being transferred by the Holder and, if less than
      the
      total number of Warrant Shares then underlying this Warrant is being
      transferred, a new Warrant (in accordance with Section 7(d))
      to the
      Holder representing the right to purchase the number of Warrant Shares not
      being
      transferred.

     

    (b) Lost,
      Stolen or Mutilated Warrant.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Warrant (as to which a written
      certification and the indemnification contemplated below shall suffice as such
      evidence), and, in the case of loss, theft or destruction, of any
      indemnification undertaking by the Holder to the Company in customary and
      reasonable form and, in the case of mutilation, upon surrender and cancellation
      of this Warrant, the Company shall execute and deliver to the Holder a new
      Warrant (in accordance with Section 7(d))
      representing the right to purchase the Warrant Shares then underlying this
      Warrant.

     

    (c) Exchangeable
      for Multiple Warrants.
      This
      Warrant is exchangeable, upon the surrender hereof by the Holder at the
      principal office of the Company, for a new Warrant or Warrants (in accordance
      with Section 7(d))
      representing in the aggregate the right to purchase the number of Warrant Shares
      then underlying this Warrant, and each such new Warrant will represent the
      right
      to purchase such portion of such Warrant Shares as is designated by the Holder
      at the time of such surrender; provided, however, that no warrants for
      fractional Common Shares shall be given.


    (d) Issuance
      of New Warrants.
      Whenever the Company is required to issue a new Warrant pursuant to the terms
      of
      this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
      (ii) shall represent, as indicated on the face of such new Warrant, the right
      to
      purchase the Warrant Shares then underlying this Warrant (or in the case of
      a
      new Warrant being issued pursuant to Section 7(a)
      or
      Section 7(c),
      the
      Warrant Shares designated by the Holder which, when added to the number of
      Common Shares underlying the other new Warrants issued in connection with such
      issuance, does not exceed the number of Warrant Shares then underlying this
      Warrant), (iii) shall have an issuance date, as indicated on the face of such
      new Warrant which is the same as the Issuance Date, and (iv) shall have the
      same
      rights and conditions as this Warrant.

     

    
      
         

      

      
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    8. NOTICES.
      Whenever notice is required to be given under this Warrant, unless otherwise
      provided herein, such notice shall be given in accordance with Section 9(f)
      of
      the Transaction Agreement. The Company shall provide the Holder with prompt
      written notice of all actions taken pursuant to this Warrant, including in
      reasonable detail a description of such action and the reason therefor. Without
      limiting the generality of the foregoing, the Company will give written notice
      to the Holder (i) immediately upon each adjustment of the Exercise Price and
      the
      number of Warrant Shares, setting forth in reasonable detail, and certifying,
      the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior
      to the date on which the Company closes its books or takes a record (A) with
      respect to any dividend or distribution upon the Common Shares, (B) with respect
      to any grants, issuances or sales of any Options, Convertible Securities or
      rights to purchase stock, warrants, securities or other property pro rata to
      the
      holders of all of the Common Shares or (C) for determining rights to vote with
      respect to any Fundamental Transaction, dissolution or liquidation, provided
      in
      each case that such information shall be made known to the public prior to
      or in
      conjunction with such notice being provided to the Holder and (iii) at least
      ten
      (10) Trading Days prior to the consummation of any Fundamental Transaction
      (excluding any Fundamental Transaction for which the Company does not have
      prior
      knowledge or notice). To the extent that any notice provided hereunder
      constitutes, or contains, material, non-public information regarding the Company
      or any of its Subsidiaries (as defined in the Transaction Agreement), the
      Company shall simultaneously file such notice with the SEC (as defined in the
      Transaction Agreement) pursuant to a Current Report on Form 8-K.

     

    9. AMENDMENT
      AND WAIVER.
      Except
      as otherwise provided herein, the provisions of this Warrant (other than Section
      1(f))
      may be
      amended and the Company may take any action herein prohibited, or omit to
      perform any act herein required to be performed by it, only if the Company
      has
      obtained the written consent of the Holder. The Holder shall be entitled, at
      its
      option, to the benefit of any amendment of any other similar warrant issued
      under the Transaction Agreement.

     

    10. SEVERABILITY.
      If any
      provision of this Warrant or the application thereof becomes or is declared
      by a
      court of competent jurisdiction to be illegal, void or unenforceable, the
      remainder of the terms of this Warrant will continue in full force and
      effect.


    11. GOVERNING
      LAW.
      This
      Warrant shall be governed by and construed and enforced in accor-dance with,
      and
      all questions concerning the construction, validity, interpretation and
      performance of this Warrant shall be governed by, the internal laws of the
      State
      of Illinois, without giving effect to any choice of law or conflict of law
      provision or rule (whether of the State of Illinois or any other jurisdictions)
      that would cause the application of the laws of any jurisdictions other than
      the
      State of Illinois.

     

    12. CONSTRUCTION;
      HEADINGS.
      This
      Warrant shall be deemed to be jointly drafted by the Company and the Holder
      and
      shall not be construed against any Person as the drafter hereof. The headings
      of
      this Warrant are for convenience of reference and shall not form part of, or
      affect the interpretation of, this Warrant.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    13. DISPUTE
      RESOLUTION.
      In the
      case of a dispute as to the determination of the Exercise Price or fair market
      value or the arithmetic calculation of the Warrant Shares, the Company or the
      Holder (as the case may be) shall submit the disputed determinations or
      arithmetic calculations (as the case may be) via facsimile within two (2)
      Business Days of receipt of the applicable notice giving rise to such dispute
      to
      the Company or the Holder (as the case may be). If the Holder and the Company
      are unable to agree upon such determination or calculation of the Exercise
      Price
      or fair market value or the number of Warrant Shares (as the case may be) within
      three (3) Business Days of such disputed determination or arithmetic calculation
      being submitted to the Company or the Holder (as the case may be), then the
      Company shall, within two (2) Business Days submit via facsimile (a) the
      disputed determination of the Exercise Price or fair market value to an
      independent, reputable investment bank selected by the Company and approved
      by
      the Holder or (b) the disputed arithmetic calculation of the Warrant Shares
      to
      the Company’s independent, outside accountant. The Company shall cause at its
      expense the investment bank or the accountant (as the case may be) to perform
      the determinations or calculations (as the case may be) and notify the Company
      and the Holder of the results no later than ten (10) Business Days from the
      time
      it receives such disputed determinations or calculations (as the case may be).
      Such investment bank’s or accountant’s determination or calculation (as the case
      may be) shall be binding upon all parties absent demonstrable
      error.

     

    14. REMEDIES,
      OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
      The
      remedies provided in this Warrant shall be cumulative and in addition to all
      other remedies available under this Warrant and the other Transaction Documents,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the Holder
      to
      pursue actual damages for any failure by the Company to comply with the terms
      of
      this Warrant. The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the holder of this Warrant shall
      be entitled, in addition to all other available remedies, to an injunction
      restraining any breach, without the necessity of showing economic loss and
      without any bond or other security being required. The issuance of shares and
      certificates for shares as contemplated hereby upon the exercise of this Warrant
      shall be made without charge to the Holder or such shares for any issuance
      tax
      or other costs in respect thereof, provided that the Company shall not be
      required to pay any tax which may be payable in respect of any transfer involved
      in the issuance and delivery of any certificate in a name other than the Holder
      or its agent on its behalf.


    15. TRANSFER. This
      Warrant may be offered for sale, sold, transferred or assigned without the
      consent of the Company, except as may otherwise be required by Section 2(g)
      of
      the Transaction Agreement.
      In
      connection with any such transfer, the Holder shall be entitled to disclose
      to
      the transferee any information about the Company, its Subsidiaries, and its
      and
      their securities, in the Holder’s possession. This Warrant shall not be
      transferred (other than to an affiliate of the Holder) unless and until the
      Company has received the opinion of counsel for the Holder (if so requested
      by
      the Company) that the securities may be transferred pursuant to an exemption
      from registration under the 1933 Act and applicable state securities laws,
      the
      availability of which is established to the reasonable satisfaction of the
      Company.

     

    
      
         

      

      
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    16. CERTAIN
      DEFINITIONS.
      For
      purposes of this Warrant, the following terms shall have the following
      meanings:

     

    (a) “Bloomberg”
means
      Bloomberg Financial Markets.

     

    (b) “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      Chicago, Illinois are authorized or required by law to remain
      closed.

     

    (c) “Common
      Shares”
means
      (i) the Company’s common shares, no par value, and (ii) any capital
      stock into which such common shares shall have been changed or any share capital
      resulting from a reclassification of such common shares.

     

    (d) “Convertible
      Securities”
means
      any stock or securities (other than Options) directly or indirectly convertible
      into or exercisable or exchangeable for Common Shares.

     

    (e) “Eligible
      Market”
means
      the The New York Stock Exchange, Inc., the Nasdaq Global Market, the Nasdaq
      Global Select Market or the Principal Market.

     

    (f) “Expiration
      Date”
means
      the date that is the five (5) year anniversary of the Issuance Date or, if
      such
      date falls on a day other than a Business Day or on which trading does not
      take
      place on the Principal Market (a “Holiday”),
      the
      next date that is not a Holiday. 

     

    (g) “Fundamental
      Transaction”
means
      that the Company shall, directly or indirectly, in one or more related
      transactions, (i) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person, or (ii) sell, assign, transfer,
      convey or otherwise dispose of all or substantially all of the properties or
      assets of the Company to another Person, or (iii) allow another Person to make
      a
      purchase, tender or exchange offer that is accepted by the holders of more
      than
      the 50% of the outstanding Common Shares (not including any Common Shares held
      by the Person or Persons making or party to, or associated or affiliated with
      the Persons making or party to, such purchase, tender or exchange offer), or
      (iv) consummate a stock purchase agreement or other business combination
      (including, without limitation, a reorganization, recapitalization, spin-off
      or
      scheme of arrangement) with another Person whereby such other Person acquires
      more than the 50% of the outstanding Common Shares (not including any Common
      Shares held by the other Person or other Persons making or party to, or
      associated or affiliated with the other Persons making or party to, such stock
      purchase agreement or other business combination), or (v) reorganize,
      recapitalize or reclassify its Common Shares, or (vi) any “person” or “group”
(as these terms are used for purposes of Sections 13(d) and 14(d) of the
      Exchange Act) is or shall become the “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
      ordinary voting power represented by issued and outstanding Common
      Shares.


    (h) “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Shares
      or
      Convertible Securities.

     

    (i) “Parent
      Entity”
of
      a
      Person means an entity that, directly or indirectly, controls the applicable
      Person and whose common stock or equivalent equity security is quoted or listed
      on an Eligible Market, or, if there is more than one such Person or Parent
      Entity, the Person or Parent Entity with the largest public market
      capitalization as of the date of consummation of the Fundamental
      Transaction.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (j) “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization, any other entity and
      a
      government or any department or agency thereof.

     

    (k) “Principal
      Market”
means
      The Nasdaq Capital Market.

     

    (l) “Successor
      Entity”
means
      the Person (or, if so elected by the Holder, the Parent Entity) formed by,
      resulting from or surviving any Fundamental Transaction or the Person (or,
      if so
      elected by the Holder, the Parent Entity) with which such Fundamental
      Transaction shall have been entered into.

     

    (m) “Trading
      Day”
means
      any day on which the Common Shares are traded on the Principal Market, or,
      if
      the Principal Market is not the principal trading market for the Common Shares,
      then on the principal securities exchange or securities market on which the
      Common Shares are then traded; provided that “Trading Day” shall not include any
      day on which the Common Shares are scheduled to trade on such exchange or market
      for less than 4.5 hours or any day that the Common Shares are suspended from
      trading during the final hour of trading on such exchange or market (or if
      such
      exchange or market does not designate in advance the closing time of trading
      on
      such exchange or market, then during the hour ending at 4:00:00 p.m., New York
      time).

     

    (n) “VWAP”
means,
      for any security as of any date, the dollar volume-weighted average price for
      such security on the Principal Market (or, if the Principal Market is not the
      principal trading market for such security, then on the principal securities
      exchange or securities market on which such security is then traded) during
      the
      period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m.,
      New
      York time, as reported by Bloomberg through its “Volume at Price” function or,
      if the foregoing does not apply, the dollar volume-weighted average price of
      such security in the over-the-counter market on the electronic bulletin board
      for such security during the period beginning at 9:30:01 a.m., New York time,
      and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if
      no
      dollar volume-weighted average price is reported for such security by Bloomberg
      for such hours, the average of the highest closing bid price and the lowest
      closing ask price of any of the market makers for such security as reported
      in
      the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
      Inc.). If VWAP cannot be calculated for such security on such date on any of
      the
      foregoing bases, the VWAP of such security on such date shall be the fair market
      value as mutually determined by the Company and the Holder. If the Company
      and
      the Holder are unable to agree upon the fair market value of such security,
      then
      such dispute shall be resolved in accordance with the procedures in Section
      13.
      All
      such determinations shall be appropriately adjusted for any share dividend,
      share split or other similar transaction during such period.

     

    [signature
      page follows]


    
      
         

      

      
        15

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to Purchase Common Shares to be duly executed
      as
      of the Issuance Date set out above.

    
      	 	 	 
	 	 
	 	 	WORKSTREAM INC.
	 
 	 
 	 
 
	 	 	By: 
	 	
              
Name:
	 	Title:


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    EXHIBIT
      A

     

    EXERCISE
      NOTICE

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON SHARES

     

    WORKSTREAM
      INC.

    The
      undersigned holder hereby exercises the right to purchase _________________
      of
      the Common Shares (“Warrant
      Shares”)
      of
      Workstream Inc., a corporation existing pursuant to the Canada Business
      Corporations Act (the “Company”),
      evidenced by the Warrant to Purchase Common Shares (the “Warrant”)
      issued
      to the undersigned holder. Capitalized terms used herein and not otherwise
      defined shall have the respective meanings set forth in the
      Warrant.

     

    1. Form
      of Exercise Price.
      The
      Holder intends that payment of the Exercise Price shall be made as:

     

    ____________ a
      “Cash
      Exercise”
with
      respect to _________________ Warrant Shares; and/or

     

    ____________ a
      “Cashless
      Exercise”
with
      respect to _______________ Warrant Shares.

     

    2. Payment
      of Exercise Price.
      In the
      event that the holder has elected a Cash Exercise with respect to some or all
      of
      the Warrant Shares to be issued pursuant hereto, the holder shall pay the
      Aggregate Exercise Price in the sum of $___________________ to the Company
      in
      accordance with the terms of the Warrant.

     

    3. Delivery
      of Warrant Shares.
      The
      Company shall deliver to holder, or its designee or agent as specified below,
      __________ Warrant Shares in accordance with the terms of the Warrant. Delivery
      shall be made to holder, or for its benefit, to the following
      address:

     

    _______________________

    _______________________

    _______________________

    _______________________

     

    4. The
      holder intends to immediately sell ___________ Warrant Shares pursuant to the
      registration statement covering the resale of such Warrant Shares and, to the
      extent applicable, in compliance with the prospectus delivery requirements
      of
      the Securities Act of 1933, as amended.

     

    


     

    Date:
      _______________ __, ______

     

     

    
      	      	 	 	 
	
              Name
                of Registered Holder

            	 	 	 



     

    
      	 	 	 	 
	By:	 	 	 
	
              
                
Name:

            	 	 	
            
	
              Title:

            	 	 	 


    

       


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    ACKNOWLEDGMENT

     

    The
      Company hereby acknowledges this Exercise Notice and hereby directs
      ______________ to issue the above indicated number of Common Shares in
      accordance with the Transfer Agent Instructions dated _____________, 2007 from
      the Company and acknowledged and agreed to by _______________.

    
      	 	 	 
	 	 
	 	 	WORKSTREAM INC.
	 
 	 
 	 
 
	 	  	By:
	 	
              
Name:
	 	Title: