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                                                                  EXHIBIT 10.3
                           GENERAL SECURITY AGREEMENT

THIS AGREEMENT is made as of January 31, 2003.


BETWEEN:            WORKSTREAM INC.,
                    a corporation incorporated under the laws of Canada

                    (hereinafter referred to as the "Debtor")

AND:                MICHAEL F. MULLARKEY,
                    an individual residing in the City of Lake Forest, Illinois

                    (hereinafter referred to as the "Secured Party").

WHEREAS the Secured Party has, on one or more prior occasions, made a loan to
the Debtor and its subsidiaries, Workstream USA, Inc., 6FigureJobs.com, Inc.,
Icarian, Inc., Rezlogic, Inc., The OmniPartners, Inc. and Xylo, Inc. (the
"Subsidiaries") (the Debtor shall act as agent for the Subsidiaries, the
"Company Agent") in the aggregate amount of One Million Two Hundred and
Eighty-Seven Thousand Nine Hundred and One Dollars and Four Cents
($1,287,901.04), and in consideration for such loan, the Debtor wishes to grant
to the Secured Party a security interest in the Collateral (as defined below);

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the covenants and agreements herein, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1.       INTERPRETATION

         1.1.     In this Agreement, unless something in the subject matter or
                  context is inconsistent therewith:

                  1.1.1.   "AGREEMENT" means this agreement and all amendments
                           made hereto by written agreement between the Secured
                           Party and the Debtor.


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                  1.1.2. "COLLATERAL" has the meaning set out in Section 2.01.

                  1.1.3.   "EVENT OF DEFAULT" has the meaning set out in Section
                           6.01.

                  1.1.4.   "LOAN" means the loan in the aggregate amount of One
                           Million Two Hundred and Eighty-Four Thousand Nine
                           Hundred and Thirty-Two Dollars and Twenty-Nine Cents
                           ($1,284,932.29) made by the Secured Party to the
                           Debtor as evidenced by a Term Note dated January 31,
                           2003 made by the Debtor and the Subsidiaries in
                           favour of the Secured Party (the "Loan Agreement").

                  1.1.5.   "OBLIGATIONS" means all obligations and liabilities
                           of any kind whatsoever of the Debtor to the Secured
                           Party in connection with or relating to the Loan.

                  1.1.6.   "PPSA" means the Personal Property Security Act
                           (Ontario), as now enacted or as the same may from
                           time to time be amended, re-enacted or replaced.

                  1.1.7.   The terms "accessions", "accounts", "chattel paper",
                           "documents of title", "goods", "instruments",
                           "intangibles", "inventory", "money", "proceeds" and
                           "securities" whenever used herein have the meanings
                           given to those terms in the PPSA.

         1.2.     SECTIONS AND HEADINGS The division of this Agreement into
                  Articles and Sections and the insertion of headings are for
                  convenience of reference only and will not affect the
                  construction or interpretation of this Agreement. The terms
                  "this Agreement", "hereof", "hereunder" and similar
                  expressions refer to this Agreement and not to any particular
                  Article, Section or other portion hereof and include any
                  agreement supplemental hereto. Unless something in the subject


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                  matter or context is inconsistent therewith, reference herein
                  to Articles and Sections are to Articles and Sections of this
                  Agreement.

         1.3.     EXTENDED MEANINGS In this Agreement words importing the
                  singular number only include the plural and vice versa, words
                  importing any gender include all genders and words importing
                  persons include individuals, partnerships, associations,
                  trusts, unincorporated organizations and corporations.

2.       GRANT OF SECURITY INTEREST

         2.1.     SECURITY INTEREST As general and continuing security for the
                  payment and performance of the Obligations, the Debtor hereby
                  grants to the Secured Party a security interest in the present
                  and future undertaking and property, both real and personal,
                  of the Debtor which are more particularly described in
                  Sections 2.11, 2.12, 2.13, 2.14 and 2.15 below (collectively,
                  the "Collateral"). As further general and continuing security
                  for the payment and performance of the Obligations, the Debtor
                  hereby assigns the Collateral to the Secured Party and
                  mortgages and charges the Collateral as and by way of a fixed
                  and specific mortgage and charge to the Secured Party.

                  2.1.1.   RECEIVABLES: all debts, accounts, claims and choses
                           in action for monetary amounts which are now or which
                           may hereafter become due, owing or accruing due to
                           the Debtor (collectively, the "Receivables");

                  2.1.2.   INVENTORY: all inventory of whatever kind and
                           wherever situated including, without limiting the
                           generality of the foregoing, all goods held for sale
                           or lease or furnished or to be furnished under
                           contracts for service or used or consumed in the
                           business of the Debtor (collectively, the
                           "Inventory");


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                  2.1.3.   EQUIPMENT: all machinery, equipment, fixtures,
                           furniture, plant, vehicles and other tangible
                           personal property which are not Inventory
                           (collectively, the "Equipment");

                  2.1.4.   SUBSTITUTIONS, ETC.: all replacements of,
                           substitutions for and increases, additions and
                           accessions to any of the property described in this
                           Section2.1; and

                  2.1.5.   PROCEEDS: all proceeds of any Collateral in any form
                           derived directly or indirectly from any dealing with
                           the Collateral or that indemnifies or compensates for
                           the loss of or damage to the Collateral;

                  provided that the said assignment and mortgage and charge will
                  not (i) extend or apply to the last day of the term of any
                  lease or any agreement therefor now held or hereafter acquired
                  by the Debtor, but should the Secured Party enforce the said
                  assignment or mortgage and charge, the Debtor will thereafter
                  stand possessed of such last day and must hold it in trust to
                  assign the same to any person acquiring such term in the
                  course of the enforcement of the said assignment and mortgage
                  and charge, or (ii) render the Secured Party liable to observe
                  or perform any term, covenant or condition of any agreement,
                  document or instrument to which the Debtor is a party or by
                  which it is bound.

         2.2.     ATTACHMENT OF SECURITY INTEREST The Debtor acknowledges that
                  value has been given and agrees that the security interest
                  granted hereby will attach when the Debtor signs this
                  Agreement and the Debtor has any rights in the Collateral.

         2.3.     EXCEPTION FOR CONTRACTUAL RIGHTS The security interest granted
                  hereby does not and will not extend to, and Collateral will
                  not include any agreement, right, franchise, licence or permit
                  (the "contractual rights") to which the Debtor is a party or
                  of which the Debtor has the benefit, to the extent that the
                  creation of the security interest herein would constitute a

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                  breach of the terms of or permit any person to terminate the
                  contractual rights, but the Debtor must hold its interest
                  therein in trust for the Secured Party and will assign such
                  contractual rights to the Secured Party forthwith upon
                  obtaining the consent of the other party thereto. The Debtor
                  agrees that it will, upon the request of the Secured Party,
                  use all commercially reasonable efforts to obtain any consent
                  required to permit any contractual rights to be subjected to
                  the security interest.

3.       GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEBTOR

         3.1.     REPRESENTATIONS AND WARRANTIES The Debtor hereby represents
                  and warrants to the Secured Party that:

                  3.1.1.   the Debtor is a corporation duly incorporated,
                           organized and subsisting under the laws of its
                           jurisdiction of incorporation, with the corporate
                           power to enter into this Agreement; this Agreement
                           has been duly authorized by all necessary corporate
                           action on the part of the Debtor and constitutes a
                           legal and valid agreement binding upon the Debtor
                           enforceable in accordance with its terms; the making
                           and performance of this Agreement will not result in
                           the breach of, constitute a default under, contravene
                           any provision of, or result in the creation of, any
                           lien, charge, security interest, encumbrance or any
                           other rights of others upon any property of the
                           Debtor pursuant to any agreement, indenture or other
                           instrument to which the Debtor is a party or by which
                           the Debtor or any of its property may be bound or
                           affected; and

                  3.1.2.   the address of the Debtor's principal place of
                           business and the office where it keeps the Collateral
                           or its records respecting the Collateral, is located
                           at 495 March Road, Suite 300, Ottawa, Ontario K2K
                           3G1.


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         3.2.     COVENANTS The Debtor covenants with the Secured Party that the
                  Debtor will:

                  3.2.1.   ensure that the representations and warranties set
                           forth in Section 3.01 will be true and correct at all
                           times;

                  3.2.2.   maintain, use and operate the Collateral and carry on
                           and conduct its business in a lawful and
                           business-like manner;

                  3.2.3.   not permit the Collateral to be affixed to real or
                           personal property so as to become a fixture or
                           accession without the prior written consent of the
                           Secured Party;

                  3.2.4.   defend the Collateral against all claims and demands
                           respecting the Collateral made by all persons at any
                           time and, except as otherwise provided herein, will
                           keep the Collateral free and clear of all security
                           interests, mortgages, charges, liens and other
                           encumbrances or interests except for those previously
                           disclosed to the Secured Party, existing as of the
                           date of this Agreement or hereafter approved in
                           writing by the Secured Party prior to their creation
                           or assumption;

                  3.2.5.   not change its principal place of business and the
                           location of the office where it keeps the Collateral
                           or its records respecting the Receivables, or move
                           any of the Inventory, Securities or Equipment from
                           the principal place of business, without the prior
                           written consent of the Secured Party;

                  3.2.6.   pay all rents, taxes, levies, assessments and
                           government fees or dues lawfully levied, assessed or
                           imposed in respect of the Collateral or any part
                           thereof as and when the same become due and payable,
                           and will exhibit to the Secured Party, when required,
                           the receipts and vouchers establishing such payment;


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                  3.2.7.   keep proper books of account in accordance with sound
                           accounting practice, will furnish to the Secured
                           Party such financial information and statements and
                           such information and statements relating to the
                           Collateral as the Secured Party may from time to time
                           require, and the Debtor will permit the Secured Party
                           or its authorized agents at any time at the expense
                           of the Debtor to examine the books of account and
                           other financial records and reports relating to the
                           Collateral and to make copies thereof and take
                           extracts therefrom;

                  3.2.8.   from time to time forthwith at the request of the
                           Secured Party furnish to the Secured Party in writing
                           all information requested relating to the Collateral,
                           and the Secured Party will be entitled from time to
                           time at any reasonable time to inspect the Collateral
                           and make copies of all information relating to the
                           Collateral and for such purposes the Secured Party
                           will have access to all premises occupied by the
                           Debtor or where the Collateral may be found;

                  3.2.9.   from time to time forthwith at the request of the
                           Secured Party execute and deliver all such financing
                           statements, schedules, assignments and documents, and
                           do all such further acts and things as may be
                           reasonably required by the Secured Party to
                           effectively carry out the full intent and meaning of
                           this Agreement or to better evidence and perfect the
                           security interest, assignment and mortgage and charge
                           granted hereby, and the Debtor hereby irrevocably
                           constitutes and appoints the Secured Party, or any
                           Receiver appointed by the court or the Secured Party,
                           the true and lawful attorney of the Debtor, with full
                           power of substitution, to do any of the foregoing in
                           the name of the Debtor whenever and wherever the
                           Secured Party or any such Receiver may consider it to
                           be necessary or expedient;


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                  3.2.10.  not change its name or, if the Debtor is a
                           corporation, will not amalgamate with any other
                           corporation without first giving notice to the
                           Secured Party of its new name and the names of all
                           amalgamating corporations and the date when such new
                           name or amalgamation is to become effective; and

                  3.2.11.  pay to the Secured Party forthwith upon demand all
                           reasonable costs and expenses (including, without
                           limiting the generality of the foregoing, all legal,
                           Receiver's and accounting fees and expenses) incurred
                           by or on behalf of the Secured Party in connection
                           with the preparation, execution and perfection of
                           this Agreement and the carrying out of any of the
                           provisions of this Agreement including, without
                           limiting the generality of the foregoing, protecting
                           and preserving the security interest, assignment and
                           mortgage and charge granted hereby and enforcing by
                           legal process or otherwise the remedies provided
                           herein; and all such costs and expenses will be added
                           to and form part of the Obligations secured
                           hereunder.

4.       INSURANCE

         4.1.     INSURANCE The Debtor must obtain and maintain, at its own
                  expense, insurance against loss or damage to the Collateral
                  including, without limiting the generality of the foregoing,
                  loss by fire (including so-called extended coverage), theft,
                  collision and such other risks of loss as are customarily
                  insured against on this type of Collateral, in an amount not
                  less than the full replacement value thereof, in such form and
                  with such insurers as are reasonably satisfactory to the
                  Secured Party. If any such policies of insurance contain a
                  co-insurance clause, the Debtor will either cause any such
                  co-insurance clause to be waived or maintain at all times a
                  sufficient amount of insurance to meet the requirements of any
                  such co-insurance clause so as to prevent the Debtor from
                  becoming a co-insurer under the terms of any such policy. All

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                  such policies must name the Secured Party as an additional
                  insured and loss payee thereof, as the Secured Party's
                  interests may appear, and must provide that the insurer will
                  give the Secured Party at least 10 days written notice of
                  intended cancellation. At the Secured Party's request, the
                  Debtor must furnish the Secured Party with a copy of any
                  policy of insurance and certificate of insurance or other
                  evidence satisfactory to the Secured Party that such insurance
                  coverage is in effect. The Debtor must give the Secured Party
                  notice of any damage to, or loss of, the Collateral forthwith
                  upon the occurrence of any such damage or loss. Should the
                  Debtor fail to make any payment or perform any other
                  obligation provided in this Section, the Secured Party will
                  have the right, but not the obligation, without notice or
                  demand upon the Debtor and without releasing the Debtor from
                  any obligation hereunder or waiving any rights to enforce this
                  Agreement, to perform any or all of such obligations. The
                  amount of all such payments made and all costs, fees and
                  expenses incurred by the Secured Party in performing such
                  obligations will be immediately due and payable by the Debtor.

5.       DEALING WITH COLLATERAL

         5.1.     DEALING WITH COLLATERAL BY THE DEBTOR The Debtor must not
                  sell, lease or otherwise dispose of any of the Collateral
                  without the prior written consent of the Secured Party, except
                  that the Debtor may, until an Event of Default occurs, deal
                  with its money or sell items of Inventory in the ordinary
                  course of its business so that the purchaser thereof takes
                  title thereto free and clear of the security interest,
                  assignment and mortgage and charge granted hereby, but all
                  proceeds of any such sale will continue to be subject to the
                  security interest, assignment and mortgage and charge granted
                  hereby and all money received by the Debtor will be received
                  as trustee for the Secured Party and must be held separate and
                  apart from other money of the Debtor and must be paid over to
                  the Secured Party upon request.


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         5.2.     RIGHTS AND DUTIES OF THE SECURED PARTY

                  5.2.1.   The Secured Party may perform any of its rights and
                           duties hereunder by or through agents and is entitled
                           to retain counsel and to act in reliance upon the
                           advice of such counsel concerning all matters
                           pertaining to its rights and duties hereunder.

                  5.2.2.   In the holding of the Collateral, the Secured Party
                           and any nominee on its behalf is only bound to
                           exercise the same degree of care as it would exercise
                           with respect to similar property of its own of
                           similar value held in the same place. The Secured
                           Party and any nominee on its behalf will be deemed to
                           have exercised reasonable care with respect to the
                           custody and preservation of the Collateral if it
                           takes such action for that purpose as the Debtor
                           reasonably requests in writing, but failure of the
                           Secured Party or its nominee to comply with any such
                           request will not of itself be deemed a failure to
                           exercise reasonable care.

         5.3.     NOTIFICATION OF ACCOUNT DEBTORS Before an Event of Default
                  occurs, the Secured Party may give notice of this Agreement
                  and the security interest and assignment granted hereby to any
                  account debtors of the Debtor or to any other person liable to
                  the Debtor and, after the occurrence of an Event of Default,
                  may give notice to any such account debtors or other person to
                  make all further payments to the Secured Party, and any
                  payment or other proceeds of Collateral received by the Debtor
                  from account debtors or from any other person liable to the
                  Debtor whether before or after any notice is given by the
                  Secured Party must be held by the Debtor in trust for the
                  Secured Party and paid over to the Secured Party on request.

         5.4.     APPLICATION OF FUNDS Except where the Debtor, when not in
                  default hereunder, so directs in writing at the time of
                  payment, all money collected or received by the Secured Party

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                  in respect of the Collateral may be applied on account of such
                  parts of the Obligations as the Secured Party in its sole
                  discretion determines, or may be held unappropriated in a
                  collateral account, or in the discretion of the Secured Party
                  may be released to the Debtor, all without prejudice to the
                  Secured Party's rights against the Debtor.

6.       EVENTS OF DEFAULT AND REMEDIES

         6.1.     EVENTS OF DEFAULT The occurrence of any of the following shall
                  be an Event of Default under this Agreement:

                  6.1.1.   the Debtor or any Subsidiary's failure to pay any
                           amounts due to the Secured Party under the Loan
                           Agreement, after expiration of any notice and cure or
                           grace periods;

                  6.1.2.   a written notice of default is received by the Debtor
                           or any Subsidiary for the failure to pay any amounts
                           due under any other agreement or instrument for
                           borrowed money, and such failure continues after the
                           expiration of any applicable notice and cure or grace
                           periods;

                  6.1.3.   the Debtor or any Subsidiary's failure to pay any
                           taxes when due unless such taxes are being contested
                           in good faith by appropriate proceedings and with
                           respect to which adequate reserves have been
                           established on the applicable Debtor or Subsidiary's
                           books;

                  6.1.4.   the Debtor or any Subsidiary's material breach of any
                           representation or warranty set forth in this
                           Agreement, which breach is not cured within seven
                           business days following Secured Party's delivery of
                           written notice of such breach to Company Agent, or if
                           such breach can not be cured within seven business

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                           days, the applicable Debtor or any Subsidiary have
                           not undertaken steps to commence cure of such breach;

                  6.1.5.   the Debtor or any Subsidiary's failure to perform any
                           covenant set forth in this Agreement, which breach is
                           not cured within seven business days following
                           Secured Party's delivery of written notice of such
                           breach to Company Agent, or if such breach can not be
                           cured within seven business days, the applicable
                           Debtor or any Subsidiary have not undertaken steps to
                           commence cure of such breach;

                  6.1.6.   the Debtor or any Subsidiary shall make an assignment
                           for the benefit of its creditors, or file a voluntary
                           petition under the bankruptcy code, any other federal
                           or state insolvency law, or apply for or consent to
                           the appointment of a receiver, trustee or custodian
                           of all or part of its property.

                  6.1.7.   the Debtor or any Subsidiary shall file an answer
                           admitting the jurisdiction of a court and the
                           material allegations of an involuntary petition filed
                           against it under the bankruptcy act, any other
                           federal or provincial insolvency law, or shall fail
                           to have such petition dismissed within 60 calendar
                           days after its filing.

                  6.1.8.   an order for relief shall be entered against the
                           Debtor or any Subsidiary following the filing of an
                           involuntary petition under the bankruptcy act, any
                           other federal or provincial insolvency law, or if an
                           order shall be entered appointing a receiver, trustee
                           or custodian of all or parts of either of their
                           respective property; or

                  6.1.9.   an attachment or levy is made upon the Collateral
                           having a value in excess of $100,000 or a judgment is
                           rendered against the Debtor or any Subsidiary's
                           property involving a liability of more than $100,000,
                           which attachment, levy or judgement shall not have


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                           been vacated, discharged, stayed or bonded pending
                           appeal within 30 calendar days from the entry
                           thereof.

         6.2.     REMEDIES Upon the occurrence of an Event of Default, the
                  Secured Party shall have the right to demand repayment in full
                  of all Obligations, whether or not otherwise due. Until all
                  Obligations shall have been paid in full, the Secured Party
                  shall retain its lien and security interest in and on the
                  Collateral. The Secured Party shall have, in addition to all
                  other rights provided herein, the rights and remedies of a
                  secured party under the PPSA, and under other applicable law,
                  all other legal and equitable rights to which Secured Party
                  may be entitled, including the right to take immediate
                  possession of the Collateral, to require the Debtor or any
                  Subsidiary to assemble the Collateral, at their expense, and
                  to make it available to the Secured Party at a place
                  designated by the Secured Party which is reasonably convenient
                  to both parties and to enter (without any breach of peace) any
                  of the premises of the Debtor or any Subsidiary or wherever
                  the Collateral shall be located, and to keep and store the
                  same on said premises until sold (and if said premises be the
                  property of such the Debtor or any Subsidiary, the Debtor or
                  any Subsidiary agrees not to charge the Secured Party for
                  storage thereof), and the right to apply for the appointment
                  of a receiver for the Debtor or any Subsidiary's property.
                  Further, the Secured Party may, at any time or times after the
                  occurrence and during the continuation of an Event of Default,
                  sell and deliver all Collateral held by or for the Secured
                  Party at public or private sale for cash, upon credit or
                  otherwise in a commercially reasonable manner and during the
                  continuation. The requirement of reasonable notice shall be
                  met if such notice is given to Company Agent at Company
                  Agent's address at least 10 business days before the time of
                  the event of which notice is being given. The Secured Party
                  may be the purchaser at any sale, if it is public. The
                  proceeds of sale shall be applied first to all costs and
                  expenses of sale, including reasonable attorneys' fees, and
                  second to the payment of all Obligations. Promptly after the
                  payment in full, Obligations, and after the payment by the

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                  Secured Party of any other amount required by any provision of
                  law, but only after the Secured Party has received what the
                  Secured Party considers reasonable proof of a subordinate
                  party's security interest), the surplus, if any, shall be paid
                  to Company Agent or its representatives or to whosoever may be
                  lawfully entitled to receive the same, or as a court of
                  competent jurisdiction may direct. The Debtor or any
                  Subsidiary shall remain liable to the Secured Party for any
                  deficiency.

7.       GENERAL

         7.1.     BENEFIT OF THE AGREEMENT This Agreement will enure to the
                  benefit of and be binding upon the heirs, personal
                  representatives, successors and permitted assigns, as the case
                  may be, of the parties hereto.

         7.2.     ENTIRE AGREEMENT This Agreement has been entered into pursuant
                  to the provisions of the Loan Agreement and is subject to all
                  the terms and conditions thereof and, if there is any conflict
                  or inconsistency between the provisions of this Agreement and
                  the provisions of the Loan Agreement, the rights and
                  obligations of the parties will be governed by the provisions
                  of the Loan Agreement. There are no representations,
                  warranties, terms, conditions, undertakings or collateral
                  agreements, express, implied or statutory, between the Secured
                  Party and the Debtor with respect to the subject matter hereof
                  except as expressly set forth herein or in the Loan Agreement.

         7.3.     AMENDMENTS AND WAIVERS No amendment to this Agreement will be
                  valid or binding unless set forth in writing and duly executed
                  by all of the parties hereto. No waiver of any breach of any
                  provision of this Agreement will be effective or binding
                  unless made in writing and signed by the party purporting to
                  give the same and, unless otherwise provided in the written
                  waiver, will be limited to the specific breach waived.


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         7.4.     ASSIGNMENT The rights of the Secured Party under this
                  Agreement may be assigned by the Secured Party without the
                  prior consent of the Debtor. The Debtor may not assign its
                  obligations under this Agreement.

         7.5.     SEVERABILITY If any provision of this Agreement is determined
                  to be invalid or unenforceable in whole or in part, such
                  invalidity or unenforceability will attach only to such
                  provision or part thereof and the remaining part of such
                  provision and all other provisions hereof will continue in
                  full force and effect.

         7.6.     NOTICES Notices shall be provided as follows:

                  To the Debtor:         Workstream Inc.
                                         495 March Road, Suite 300
                                         Ottawa, ON  K2K 3G1
                                         Attn:  Paul Haggard

                  With a copy to:        Michael A. Gerrior
                                         Perley-Robertson, Hill & McDougall LLP
                                         90 Sparks Street, Suite 400
                                         Ottawa, ON K1P 1E2

                  To the Secured Party:  1050 West Deerpath Road
                                         Lake Forest, Illinois  60045

                  Any notice or request hereunder may be given to Company Agent
                  or the Secured Party at the respective addresses set forth
                  above or as may hereafter be specified in a notice designated
                  as a change of address under this Paragraph 7. Any notice or
                  request hereunder shall be given by registered or certified
                  mail, return receipt requested, hand delivery, overnight mail
                  or telecopy (confirmed by mail). Notices and requests shall be
                  deemed to have been given and received, in the case of those
                  by hand delivery, when delivered to any officer of the party
                  to whom it is addressed, in the case of those by mail or
                  overnight mail, deemed to have been given and received on the
                  fifth calendar day following deposit in the mail, or the next

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                  business day following deposit with a reputable overnight mail
                  carrier, and, in the case of a telecopy, when sent if during
                  normal business hours for recipient or if after normal
                  business hours for the recipient, the next business day.
                  Notice to counsel for either party shall not be deemed to be
                  notice to such party.

         7.7.     ADDITIONAL CONTINUING SECURITY This Agreement and the security
                  interest, assignment and mortgage and charge granted hereby
                  are in addition to and not in substitution for any other
                  security now or hereafter held by the Secured Party and this
                  Agreement is a continuing agreement and security that will
                  remain in full force and effect until discharged by the
                  Secured Party.

         7.8.     FURTHER ASSURANCES The Debtor must at its expense from time to
                  time do, execute and deliver, or cause to be done, executed
                  and delivered, all such financing statements, further
                  assignments, documents, acts, matters and things as may be
                  reasonably requested by the Secured Party for the purpose of
                  giving effect to this Agreement or for the purpose of
                  establishing compliance with the representations, warranties
                  and covenants herein contained.

         7.9.     POWER OF ATTORNEY Upon the occurrence of an Event of Default
                  that is continuing, the Debtor hereby irrevocably constitutes
                  and appoints any officer for the time being of the Secured
                  Party the true and lawful attorney of the Debtor, with full
                  power of substitution, to do, make and execute all such
                  statements, assignments, documents, acts, matters or things
                  with the right to use the name of the Debtor whenever and
                  wherever the officer may deem necessary or expedient and from
                  time to time to exercise all rights and powers and to perform
                  all acts of ownership in respect to the Collateral in
                  accordance with this Agreement.

         7.10.    DISCHARGE The Debtor will not be discharged from any of the
                  Obligations or from this Agreement except by a release or
                  discharge signed in writing by the Secured Party. Promptly
                  upon satisfaction in full of the Obligations, the Secured


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                  Party shall deliver to the Debtor such documents, agreements
                  or instruments as shall be reasonably requested by the Debtor
                  to evidence satisfaction of the Obligations and the release or
                  other termination of the Secured Party's interest in the
                  Collateral.

         7.11.    GOVERNING LAW This Agreement will be governed by and construed
                  in accordance with the laws of the Province of Ontario and the
                  laws of Canada applicable therein.

         7.12.    EXECUTED COPY The Debtor acknowledges receipt of a fully
                  executed copy of this Agreement.

         7.13.    COUNTERPARTS; FACSIMILE SIGNATURES This Agreement may be
                  executed in one or more counterparts, each of which shall
                  constitute an original and all of which taken together shall
                  constitute one and the same agreement. Any signature delivered
                  by a party via facsimile transmission shall be deemed to be
                  any original signature hereto.

         7.14.    CONFIDENTIALITY The Secured Party shall hold and protect from
                  disclosure all confidential non-public information regarding
                  the Debtor and any Subsidiary (whether financial or otherwise)
                  obtained pursuant to the requirements of this Agreement in the
                  same manner as the Secured Party protects its own confidential
                  non-public information from disclosure, but in any event with
                  no less than reasonable care; PROVIDED that the Secured Party
                  may make disclosures of such information to those officers,
                  directors, employees, agents and representatives of the
                  Secured Party who have a need to know such information for
                  purposes of administering the Secured Party's rights and
                  obligations under this Agreement, so long as such officers,
                  directors, employees, agents and representatives are subject

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                  to an obligation of confidentiality at least as restrictive as
                  the one set forth in this Section 7.14.

         IN WITNESS WHEREOF this Agreement has been executed by the Debtor.

                                              WORKSTREAM INC.

                                              By: /S/ PAUL HAGGARD
                                                 ------------------------------
                                              Name:  Paul Haggard
                                              Title:  Chief Financial Officer


Witness: /S/ BARBARA JOFFEE                   /S/ MICHAEL MULLARKEY
        ------------------------------        ---------------------------------
                                              MICHAEL F. MULLARKEY



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