Document:

REGISTRATION RIGHTS AGREEMENT

            This  Registration  Rights Agreement (this  "Agreement") is made and
entered into as of December 15, 2004, by and among  Workstream  Inc., a Canadian
corporation  (the  "Company"),  and the purchasers  signatory  hereto (each such
purchaser, a "Purchaser" and collectively, the "Purchasers").

            This  Agreement  is  made  pursuant  to  the   Securities   Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").

            The Company and the Purchasers hereby agree as follows:

      1.  Definitions.  Capitalized  terms used and not otherwise defined herein
that are defined in the Purchase  Agreement  shall have the meanings  given such
terms in the Purchase Agreement. As used in this Agreement,  the following terms
shall have the following meanings:

            "Advice" shall have the meaning set forth in Section 6(d).

            "Effectiveness   Date"  means,  with  respect  to  the  Registration
      Statement  required  to be filed  hereunder,  the earlier of (a) the 120th
      calendar day following the Closing Date of the Purchase Agreement, and (b)
      the fifth  Trading Day following the date on which the Company is notified
      by the Commission that the Registration  Statement will not be reviewed or
      is no longer  subject  to  further  review  and  comments  and there is no
      prohibition  under the Instructions to Item 7 of Form 8-K on declaring the
      Registration Statement effective.

            "Effectiveness  Period"  shall have the meaning set forth in Section
      2(a).

            "Event" shall have the meaning set forth in Section 2(b).

            "Event Date" shall have the meaning set forth in Section 2(b).

            "Filing  Date"  means,  with respect to the  Registration  Statement
      required  to be filed  hereunder,  the 45th  calendar  day  following  the
      Closing Date of the Purchase Agreement.

            "Holder" or "Holders"  means the holder or holders,  as the case may
      be, from time to time of Registrable Securities.

            "Indemnified  Party"  shall  have the  meaning  set forth in Section
      5(c).

            "Indemnifying  Party"  shall have the  meaning  set forth in Section
      5(c).

            "Losses" shall have the meaning set forth in Section 5(a).

            "Proceeding"  means  an  action,   claim,  suit,   investigation  or
      proceeding  (including,  without  limitation,  an investigation or partial
      proceeding, such as a deposition), whether commenced or threatened.

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            "Prospectus"  means  the  prospectus  included  in the  Registration
      Statement (including,  without limitation,  a prospectus that includes any
      information  previously  omitted  from a  prospectus  filed  as part of an
      effective  registration  statement in reliance upon Rule 430A  promulgated
      under the Securities  Act), as amended or  supplemented  by any prospectus
      supplement,  with  respect to the terms of the  offering of any portion of
      the Registrable Securities covered by the Registration Statement,  and all
      other   amendments   and   supplements   to  the   Prospectus,   including
      post-effective  amendments,  and all material incorporated by reference or
      deemed to be incorporated by reference in such Prospectus.

            "Registrable Securities" means all of the Shares.

            "Registration  Statement" means the registration statements required
      to be filed hereunder, including (in each case) the Prospectus, amendments
      and  supplements to the  registration  statement or Prospectus,  including
      pre- and post-effective amendments, all exhibits thereto, and all material
      incorporated by reference or deemed to be incorporated by reference in the
      registration statement.

            "Rule 415" means Rule 415 promulgated by the Commission  pursuant to
      the Securities  Act, as such Rule may be amended from time to time, or any
      similar rule or  regulation  hereafter  adopted by the  Commission  having
      substantially the same purpose and effect as such Rule.

            "Rule 424" means Rule 424 promulgated by the Commission  pursuant to
      the Securities  Act, as such Rule may be amended from time to time, or any
      similar rule or  regulation  hereafter  adopted by the  Commission  having
      substantially the same purpose and effect as such Rule.

      2. Registration.

            (a) On or prior to the Filing Date,  the Company  shall  prepare and
      file with the  Commission  a  Registration  Statement,  or  include  in an
      amendment  to a  previously  filed  Registration  Statement,  covering the
      resale of all of the Registrable  Securities for an offering to be made on
      a  continuous  basis  pursuant  to Rule 415.  The  Registration  Statement
      required hereunder shall be on Form S-3 (except if the Company is not then
      eligible to register for resale the Registrable Securities on Form S-3, in
      which  case the  Registration  shall  be on  another  appropriate  form in
      accordance herewith).  The Registration Statement required hereunder shall
      contain (except if otherwise  directed by the Holders)  substantially  the
      "Plan of Distribution" attached hereto as Annex A. Subject to the terms of
      this  Agreement,  the  Company  shall  use its best  efforts  to cause the
      Registration  Statement to be declared  effective under the Securities Act
      as  promptly as possible  after the filing  thereof,  but in any event not
      later than the Effectiveness  Date, and shall use its best efforts to keep
      the Registration Statement continuously effective under the Securities Act
      until the date when all Registrable Securities covered by the Registration
      Statement  have  been  sold or may be  sold  without  volume  restrictions
      pursuant  to Rule  144(k) as  determined  by the  counsel  to the  Company
      pursuant to a written  opinion  letter to such  effect,  addressed  to the
      Company's  transfer  agent and the affected  Holders  (the  "Effectiveness
      Period").

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<PAGE>

            (b) If: (i) a Registration Statement is not filed on or prior to the
      Filing  Date  (if  the  Company  files  a  Registration  Statement,  or an
      amendment to a previously filed Registration Statement,  without affording
      the Holder the  opportunity  to review and comment on the same as required
      by Section 3(a),  the Company shall not be deemed to have  satisfied  this
      clause  (i)),  or (ii) the  Company  fails to file with the  Commission  a
      request for acceleration in accordance with Rule 461 promulgated under the
      Securities  Act,  within five Trading Days of the date that the Company is
      notified  (orally or in writing,  whichever is earlier) by the  Commission
      that a Registration Statement will not be "reviewed," or is not subject to
      further  review,  and  if  the  Commission  is not  then  prohibited  from
      declaring   the   Registration   Statement   effective   pursuant  to  the
      Instructions  to Item 7 of Form 8-K,  or (iii) prior to the date when such
      Registration Statement is first declared effective by the Commission,  the
      Company fails to file a pre-effective  amendment and otherwise  respond in
      writing to comments made by the Commission in respect of such Registration
      Statement  within 30  calendar  days after the  receipt of  comments by or
      notice from the Commission  that such amendment is required in order for a
      Registration  Statement to be declared  effective,  or (iv) a Registration
      Statement  filed  or  required  to be  filed  hereunder  is  not  declared
      effective by the  Commission on or before the  Effectiveness  Date, or (v)
      after  a  Registration  Statement  is  first  declared  effective  by  the
      Commission,  it ceases for any reason to remain continuously  effective as
      to all Registrable Securities for which it is required to be effective, or
      the Holders are not permitted to utilize the Prospectus  therein to resell
      such Registrable Securities,  for in any such case 10 consecutive calendar
      days but no more than an aggregate of 15 calendar days during any 12 month
      period (which need not be  consecutive  Trading  Days)(any such failure or
      breach being  referred to as an "Event," and for purposes of clause (i) or
      (iv) the date on which such Event  occurs,  or for purposes of clause (ii)
      the date on which  such  five  Trading  Day  period  is  exceeded,  or for
      purposes of clause (iii) the date which such 30 calendar days is exceeded,
      or for purposes of clause (v) the date on which such 10 or 15 calendar day
      period,  as  applicable,  is exceeded  being referred to as "Event Date"),
      then in addition to any other  rights the  Holders may have  hereunder  or
      under  applicable law: (x) on the first monthly  anniversary of such Event
      Date the Company  shall pay to each  Holder an amount in cash,  as partial
      liquidated  damages and not as a penalty,  equal to 2.0% of the  aggregate
      purchase price paid by such Holder pursuant to the Purchase  Agreement for
      any  Registrable  Securities  then  held by such  Holder;  and (y) on each
      subsequent monthly  anniversary of each such Event Date (if the applicable
      Event shall not have been cured by such date) until the  applicable  Event
      is  cured,  the  Company  shall pay to each  Holder an amount in cash,  as
      partial  liquidated  damages  and not as a  penalty,  equal to 1.5% of the
      aggregate  purchase  price paid by such Holder  pursuant  to the  Purchase
      Agreement for any Registrable  Securities then held by such Holder. If the
      Company  fails to pay any  partial  liquidated  damages  pursuant  to this
      Section in full within seven days after the date payable, the Company will
      pay  interest  thereon at a rate of 18% per annum (or such lesser  maximum
      amount  that is  permitted  to be paid by  applicable  law) to the Holder,
      accruing daily from the date such partial liquidated damages are due until
      such  amounts,  plus  all such  interest  thereon,  are paid in full.  The
      partial  liquidated  damages pursuant to the terms hereof shall apply on a
      daily  pro-rata  basis for any  portion of a month prior to the cure of an
      Event.

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<PAGE>

      3. Registration Procedures

      In connection with the Company's registration  obligations hereunder,  the
Company shall:

            (a) Not less  than  five  Trading  Days  prior to the  filing of the
      Registration  Statement  or any related  Prospectus  or any  amendment  or
      supplement  thereto,  the Company shall, (i) furnish to the Holders copies
      of  all  such  documents   proposed  to  be  filed  (including   documents
      incorporated or deemed  incorporated by reference to the extent  requested
      by such  Person)  which  documents  will be  subject to the review of such
      Holders,   and  (ii)  cause  its  officers  and  directors,   counsel  and
      independent  certified public  accountants to respond to such inquiries as
      shall be necessary,  in the  reasonable  opinion of respective  counsel to
      conduct a reasonable  investigation  within the meaning of the  Securities
      Act.  The Company  shall not file the  Registration  Statement or any such
      Prospectus or any amendments or  supplements  thereto to which the Holders
      of a majority of the Registrable  Securities  shall  reasonably  object in
      good faith,  provided  that the Company is notified of such  objection  in
      writing  no later  than 5  Trading  Days  after the  Holders  have been so
      furnished  copies of such documents.  Each Holder agrees to furnish to the
      Company a completed  Questionnaire  in the form attached to this Agreement
      as Annex B (a "Selling  Holder  Questionnaire")  not less than two Trading
      Days prior to the  Filing  Date or by the end of the  fourth  Trading  Day
      following  the date on which  such  Holder  receives  draft  materials  in
      accordance  with  item  (i) of this  Section.  A delay  by any  Holder  in
      providing  such  completed  Questionnaire  to the Company shall extend all
      time  periods  in this  Agreement  for the  Company to take  action  which
      requires the information requested by such Questionnaire.

            (b) (i)  Prepare  and file  with  the  Commission  such  amendments,
      including post-effective amendments, to the Registration Statement and the
      Prospectus  used in  connection  therewith as may be necessary to keep the
      Registration   Statement  continuously  effective  as  to  the  applicable
      Registrable  Securities for the Effectiveness  Period and prepare and file
      with the Commission  such additional  Registration  Statements in order to
      register  for  resale  under  the  Securities  Act all of the  Registrable
      Securities;   (ii)  cause  the  related   Prospectus   to  be  amended  or
      supplemented by any required Prospectus supplement, and as so supplemented
      or amended to be filed  pursuant to Rule 424; (iii) respond as promptly as
      reasonably  possible to any comments  received  from the  Commission  with
      respect to the  Registration  Statement or any  amendment  thereto and, as
      promptly as reasonably  possible,  upon request,  provide the Holders true
      and  complete  copies  of all  correspondence  from and to the  Commission
      relating to the  Registration  Statement;  and (iv) comply in all material
      respects with the  provisions of the  Securities  Act and the Exchange Act
      with respect to the disposition of all Registrable  Securities  covered by
      the Registration Statement during the applicable period in accordance with
      the intended  methods of disposition  by the Holders  thereof set forth in
      the  Registration  Statement  as so  amended or in such  Prospectus  as so
      supplemented.

            (c)  Notify  the  Holders of  Registrable  Securities  to be sold as
      promptly as  reasonably  possible  and (if  requested  by any such Person)
      confirm such notice in writing  promptly  following  the day (i)(A) when a
      Prospectus or any Prospectus supplement or post-effective amendment to the
      Registration  Statement is proposed to be filed;  (B) when the  Commission
      notifies the Company whether there will be a "review" of the  Registration
      Statement  and  whenever  the  Commission   comments  in  writing  on  the
      Registration  Statement  (the Company shall upon request  provide true and
      complete copies thereof and all written  responses  thereto to each of the
      Holders);  and (C)  with  respect  to the  Registration  Statement  or any
      post-effective  amendment, when the same has become effective; (ii) of any
      request  by the  Commission  or any other  Federal  or state  governmental
      authority during the period of effectiveness of the Registration Statement
      for amendments or supplements to the Registration  Statement or Prospectus
      or for additional information;  (iii) of the issuance by the Commission or
      any  other  federal  or state  governmental  authority  of any stop  order
      suspending the effectiveness of the Registration Statement covering any or
      all of the Registrable Securities or the initiation of any Proceedings for
      that purpose;  (iv) of the receipt by the Company of any notification with
      respect  to  the  suspension  of  the   qualification  or  exemption  from
      qualification  of  any of  the  Registrable  Securities  for  sale  in any
      jurisdiction,  or the initiation or threatening of any Proceeding for such
      purpose;  and (v) of the  occurrence  of any event or passage of time that
      makes the  financial  statements  included in the  Registration  Statement
      ineligible for inclusion therein or any statement made in the Registration
      Statement  or  Prospectus  or any  document  incorporated  or deemed to be
      incorporated  therein by reference  untrue in any material respect or that
      requires any revisions to the Registration Statement,  Prospectus or other
      documents  so  that,  in the  case of the  Registration  Statement  or the
      Prospectus,  as the case may be, it will not contain any untrue  statement
      of a  material  fact or omit to state any  material  fact  required  to be
      stated  therein or necessary to make the statements  therein,  in light of
      the circumstances under which they were made, not misleading.

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<PAGE>

            (d) Use  commercially  reasonable  efforts to avoid the issuance of,
      or, if  issued,  obtain the  withdrawal  of (i) any order  suspending  the
      effectiveness of the Registration Statement, or (ii) any suspension of the
      qualification (or exemption from  qualification) of any of the Registrable
      Securities  for  sale in any  jurisdiction,  at the  earliest  practicable
      moment.

            (e) Furnish to each Holder,  without charge,  at least one conformed
      copy of the Registration  Statement and each amendment thereto,  including
      financial statements and schedules,  all documents  incorporated or deemed
      to be  incorporated  therein by reference to the extent  requested by such
      Person, and all exhibits to the extent requested by such Person (including
      those  previously  furnished or incorporated by reference)  promptly after
      the filing of such documents with the Commission.

            (f) Promptly deliver to each Holder,  without charge, as many copies
      of the Prospectus or Prospectuses  (including each form of prospectus) and
      each  amendment  or  supplement  thereto as such  Persons  may  reasonably
      request  in  connection   with  resales  by  the  Holder  of   Registrable
      Securities.  Subject to the terms of this  Agreement,  the Company  hereby
      consents to the use of such  Prospectus  and each  amendment or supplement
      thereto by each of the selling Holders in connection with the offering and
      sale of the  Registrable  Securities  covered by such  Prospectus  and any
      amendment  or  supplement  thereto,  except after the giving on any notice
      pursuant to Section 3(c).

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<PAGE>

            (g) Prior to any resale of Registrable  Securities by a Holder,  use
      its  commercially  reasonable  efforts to register or qualify or cooperate
      with  the  selling  Holders  in  connection   with  the   registration  or
      qualification  (or exemption from the  Registration or  qualification)  of
      such  Registrable  Securities  for the  resale  by the  Holder  under  the
      securities or Blue Sky laws of such jurisdictions within the United States
      as any Holder reasonably  requests in writing, to keep the Registration or
      qualification (or exemption  therefrom) effective during the Effectiveness
      Period and to do any and all other acts or things reasonably  necessary to
      enable the disposition in such jurisdictions of the Registrable Securities
      covered by the Registration  Statement;  provided,  that the Company shall
      not be required to qualify  generally  to do business in any  jurisdiction
      where it is not then so qualified, subject the Company to any material tax
      in any such jurisdiction where it is not then so subject or file a general
      consent to service of process in any such jurisdiction.

            (h) If  requested  by the  Holders,  cooperate  with the  Holders to
      facilitate   the  timely   preparation   and   delivery  of   certificates
      representing  Registrable  Securities  to  be  delivered  to a  transferee
      pursuant to the Registration Statement,  which certificates shall be free,
      to the extent  permitted by the  Purchase  Agreement,  of all  restrictive
      legends,  and  to  enable  such  Registrable  Securities  to  be  in  such
      denominations  and  registered  in such  names  as any  such  Holders  may
      request.

            (i)  Upon  the  occurrence  of any  event  contemplated  by  Section
      3(c)(v),  as promptly as  reasonably  possible,  prepare a  supplement  or
      amendment,  including  a  post-effective  amendment,  to the  Registration
      Statement  or a  supplement  to the  related  Prospectus  or any  document
      incorporated or deemed to be incorporated  therein by reference,  and file
      any other required document so that, as thereafter delivered,  neither the
      Registration   Statement  nor  such  Prospectus  will  contain  an  untrue
      statement of a material  fact or omit to state a material fact required to
      be stated therein or necessary to make the statements therein, in light of
      the  circumstances  under  which they were made,  not  misleading.  If the
      Company  notifies the Holders in accordance  with clauses (ii) through (v)
      of  Section  3(c)  above to suspend  the use of any  Prospectus  until the
      requisite  changes to such  Prospectus  have been made,  then the  Holders
      shall  suspend  use of such  Prospectus.  The  Company  will  use its best
      efforts  to  ensure  that  the use of the  Prospectus  may be  resumed  as
      promptly as is practicable.  The Company shall be entitled to exercise its
      right  under  this  Section  3(i)  to  suspend  the   availability   of  a
      Registration   Statement  and  Prospectus,   subject  to  the  payment  of
      liquidated damages pursuant to Section 2(b), for a period not to exceed 60
      days (which need not be consecutive days) in any 12 month period.

            (j)  Comply  with  all  applicable  rules  and  regulations  of  the
      Commission.

            (k) The Company may require  each  selling  Holder to furnish to the
      Company a certified  statement  as to the number of shares of Common Stock
      beneficially  owned by such Holder and the person  thereof that has voting
      and dispositive  control over the Securities.  During any periods that the
      Company is unable to meet its  obligations  hereunder  with respect to the
      registration of the Registrable Securities solely because any Holder fails
      to furnish such  information  within three  Trading Days of the  Company's
      request,  any  liquidated  damages that are accruing at such time shall be
      tolled and any Event that may otherwise occur solely because of such delay
      shall be suspended until such information is delivered to the Company.

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<PAGE>

      4.  Registration   Expenses.   All  fees  and  expenses  incident  to  the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company  whether or not any  Registrable  Securities are sold pursuant to
the Registration  Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with the Trading  Market on which the Common  Stock is then
listed for trading,  and (B) in compliance with applicable  state  securities or
Blue Sky laws), (ii) printing expenses (including, without limitation,  expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the  printing of  prospectuses  is  reasonably  requested by the holders of a
majority of the Registrable Securities included in the Registration  Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance,  if the Company
so desires  such  insurance,  and (vi) fees and  expenses  of all other  Persons
retained by the Company in connection with the  consummation of the transactions
contemplated  by this Agreement.  In addition,  the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities  exchange  as  required  hereunder.  In no event shall the Company be
responsible  for any  broker or  similar  commissions  or,  except to the extent
provided for in the Transaction Documents,  any legal fees or other costs of the
Holders.

      5. Indemnification

            (a)   Indemnification   by   the   Company.   The   Company   shall,
      notwithstanding  any  termination  of this  Agreement,  indemnify and hold
      harmless  each Holder,  the officers,  directors,  agents and employees of
      each of them, each Person who controls any such Holder (within the meaning
      of Section 15 of the Securities Act or Section 20 of the Exchange Act) and
      the officers,  directors,  agents and  employees of each such  controlling
      Person,  to the fullest  extent  permitted  by  applicable  law,  from and
      against  any  and  all  losses,  claims,   damages,   liabilities,   costs
      (including,  without limitation,  reasonable attorneys' fees) and expenses
      (collectively,  "Losses"), as incurred,  arising out of or relating to any
      untrue or alleged  untrue  statement of a material  fact  contained in the
      Registration Statement, any Prospectus or any form of prospectus or in any
      amendment  or  supplement  thereto or in any  preliminary  prospectus,  or
      arising  out of or  relating  to any  omission  or alleged  omission  of a
      material  fact  required  to be stated  therein or  necessary  to make the
      statements therein (in the case of any Prospectus or form of prospectus or
      supplement  thereto,  in light of the circumstances  under which they were
      made) not misleading,  except to the extent, but only to the extent,  that
      (i) such untrue  statements or omissions are based solely upon information
      regarding  such Holder  furnished in writing to the Company by such Holder
      expressly for use therein,  or to the extent that such information relates
      to such  Holder  or such  Holder's  proposed  method  of  distribution  of
      Registrable  Securities and was reviewed and expressly approved in writing
      by such  Holder  expressly  for use in the  Registration  Statement,  such
      Prospectus  or such form of  Prospectus  or in any amendment or supplement
      thereto (it being  understood  that the Holder has  reviewed  and approved
      Annex A hereto for this  purpose) or (ii) in the case of an  occurrence of
      an event of the type  specified in Section  3(c)(ii)-(v),  the use by such
      Holder of an  outdated  or  defective  Prospectus  after the  Company  has
      notified  such  Holder in  writing  that the  Prospectus  is  outdated  or
      defective  and  prior  to  the  receipt  by  such  Holder  of  the  Advice
      contemplated  in Section  6(d).  The  Company  shall  notify  the  Holders
      promptly of the  institution,  threat or  assertion of any  Proceeding  of
      which  the  Company  is  aware  in   connection   with  the   transactions
      contemplated by this Agreement.

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            (b) Indemnification by Holders. Each Holder shall, severally and not
      jointly, indemnify and hold harmless the Company, its directors, officers,
      agents and  employees,  each Person who controls  the Company  (within the
      meaning of Section 15 of the Securities Act and Section 20 of the Exchange
      Act), and the directors, officers, agents or employees of such controlling
      Persons,  to the fullest  extent  permitted by  applicable  law,  from and
      against all Losses,  as  incurred,  to the extent  arising out of or based
      solely  upon:  (x) such  Holder's  failure to comply  with the  prospectus
      delivery  requirements  of the Securities Act or (y) any untrue or alleged
      untrue  statement  of  a  material  fact  contained  in  any  Registration
      Statement, any Prospectus,  or any form of prospectus, or in any amendment
      or supplement thereto or in any preliminary prospectus,  or arising out of
      or  relating  to any  omission  or alleged  omission  of a  material  fact
      required to be stated therein or necessary to make the statements  therein
      not misleading (i) to the extent, but only to the extent, that such untrue
      statement  or omission is  contained  in any  information  so furnished in
      writing by such Holder to the Company  specifically  for  inclusion in the
      Registration  Statement or such  Prospectus or (ii) to the extent that (1)
      such  untrue  statement  or  omission  is based  solely  upon  information
      regarding  such Holder  furnished in writing to the Company by such Holder
      expressly for use therein,  or to the extent that such information relates
      to such  Holder  or such  Holder's  proposed  method  of  distribution  of
      Registrable  Securities and was reviewed and expressly approved in writing
      by such  Holder  expressly  for use in the  Registration  Statement,  such
      Prospectus  or such form of  Prospectus  or in any amendment or supplement
      thereto (it being  understood  that the Holder has  reviewed  and approved
      Annex A hereto for this purpose) or (2) in the case of an occurrence of an
      event of the  type  specified  in  Section  3(c)(ii)-(v),  the use by such
      Holder of an  outdated  or  defective  Prospectus  after the  Company  has
      notified  such  Holder in  writing  that the  Prospectus  is  outdated  or
      defective  and  prior  to  the  receipt  by  such  Holder  of  the  Advice
      contemplated  in Section  6(d).  In no event  shall the  liability  of any
      selling  Holder  hereunder be greater in amount than the dollar  amount of
      the net proceeds  received by such Holder upon the sale of the Registrable
      Securities giving rise to such indemnification obligation.

            (c) Conduct of Indemnification  Proceedings. If any Proceeding shall
      be brought or asserted against any Person entitled to indemnity  hereunder
      (an "Indemnified Party"), such Indemnified Party shall promptly notify the
      Person  from  whom  indemnity  is sought  (the  "Indemnifying  Party")  in
      writing,  and the  Indemnifying  Party  shall have the right to assume the
      defense   thereof,   including  the   employment  of  counsel   reasonably
      satisfactory  to the  Indemnified  Party and the  payment  of all fees and
      expenses incurred in connection with defense thereof;  provided,  that the
      failure of any Indemnified Party to give such notice shall not relieve the
      Indemnifying  Party of its  obligations  or  liabilities  pursuant to this
      Agreement,  except (and only) to the extent that such  failure  shall have
      prejudiced the Indemnifying Party.

                                       8
<PAGE>

            An Indemnified Party shall have the right to employ separate counsel
      in any such Proceeding and to participate in the defense thereof,  but the
      fees  and  expenses  of  such  counsel  shall  be at the  expense  of such
      Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
      in writing to pay such fees and expenses; (2) the Indemnifying Party shall
      have  failed  promptly  to assume the  defense of such  Proceeding  and to
      employ counsel  reasonably  satisfactory to such Indemnified  Party in any
      such  Proceeding;  or  (3)  the  named  parties  to  any  such  Proceeding
      (including any impleaded  parties) include both such Indemnified Party and
      the Indemnifying  Party, and a material  conflict of interest is likely to
      exist if the same counsel were to represent such Indemnified Party and the
      Indemnifying  Party (in which case, if such Indemnified Party notifies the
      Indemnifying Party in writing that it elects to employ separate counsel at
      the expense of the Indemnifying  Party,  the Indemnifying  Party shall not
      have the right to assume the defense  thereof and the reasonable  fees and
      expenses  of  one  separate  counsel  shall  be  at  the  expense  of  the
      Indemnifying  Party).  The Indemnifying  Party shall not be liable for any
      settlement of any such Proceeding  effected  without its written  consent,
      which shall not be unreasonably  withheld.  No  Indemnifying  Party shall,
      without the prior written  consent of the  Indemnified  Party,  effect any
      settlement of any pending  Proceeding in respect of which any  Indemnified
      Party is a party, unless such settlement includes an unconditional release
      of such  Indemnified  Party  from all  liability  on  claims  that are the
      subject matter of such Proceeding.

            Subject  to the terms of this  Agreement,  all  reasonable  fees and
      expenses of the Indemnified Party (including  reasonable fees and expenses
      to the extent  incurred in connection with  investigating  or preparing to
      defend such  Proceeding in a manner not  inconsistent  with this Section),
      other  than  legal  fees  incurred  by the  Indemnified  Party  after  the
      Indemnifying  Party has assumed defense of such Proceeding,  shall be paid
      to the Indemnified Party, as incurred,  within ten Trading Days of written
      notice thereof to the Indemnifying Party;  provided,  that the Indemnified
      Party shall promptly  reimburse the Indemnifying Party for that portion of
      such  fees  and  expenses  applicable  to  such  actions  for  which  such
      Indemnified Party is not entitled to indemnification hereunder, determined
      based upon the relative faults of the parties.

            (d) Contribution.  If a claim for indemnification under Section 5(a)
      or 5(b) is unavailable to an Indemnified Party (by reason of public policy
      or otherwise),  then each Indemnifying Party, in lieu of indemnifying such
      Indemnified  Party, shall contribute to the amount paid or payable by such
      Indemnified  Party as a result of such Losses,  in such  proportion  as is
      appropriate  to reflect the relative fault of the  Indemnifying  Party and
      Indemnified Party in connection with the actions,  statements or omissions
      that  resulted  in such  Losses  as well as any other  relevant  equitable
      considerations.   The  relative  fault  of  such  Indemnifying  Party  and
      Indemnified Party shall be determined by reference to, among other things,
      whether any action in  question,  including  any untrue or alleged  untrue
      statement of a material fact or omission or alleged omission of a material
      fact,  has been taken or made by, or relates to  information  supplied by,
      such  Indemnifying  Party or Indemnified  Party, and the parties' relative
      intent,  knowledge,  access to information  and  opportunity to correct or
      prevent such action,  statement or omission. The amount paid or payable by
      a party as a result of any Losses  shall be deemed to include,  subject to
      the limitations set forth in this Agreement,  any reasonable attorneys' or
      other  reasonable  fees or expenses  incurred by such party in  connection
      with any  Proceeding to the extent such party would have been  indemnified
      for such fees or  expenses  if the  indemnification  provided  for in this
      Section was available to such party in accordance with its terms.

                                       9
<PAGE>

            The parties  hereto agree that it would not be just and equitable if
      contribution  pursuant to this  Section 5(d) were  determined  by pro rata
      allocation  or by any other method of  allocation  that does not take into
      account  the  equitable  considerations  referred  to in  the  immediately
      preceding paragraph.  Notwithstanding the provisions of this Section 5(d),
      no Holder shall be required to contribute, in the aggregate, any amount in
      excess of the  amount  by which the  proceeds  actually  received  by such
      Holder  from  the  sale  of  the  Registrable  Securities  subject  to the
      Proceeding  exceeds  the  amount  of any  damages  that  such  Holder  has
      otherwise  been required to pay by reason of such untrue or alleged untrue
      statement or omission or alleged omission,  except in the case of fraud by
      such Holder.

            The indemnity and contribution  agreements contained in this Section
      are in addition to any liability that the Indemnifying Parties may have to
      the Indemnified Parties.

      6. Miscellaneous

            (a) Remedies. In the event of a breach by the Company or by a Holder
      of any of their  obligations  under  this  Agreement,  each  Holder or the
      Company, as the case may be, in addition to being entitled to exercise all
      rights  granted by law and under this  Agreement,  including  recovery  of
      damages, will be entitled to specific performance of its rights under this
      Agreement.  The Company and each Holder agree that monetary  damages would
      not provide  adequate  compensation for any losses incurred by reason of a
      breach by it of any of the provisions of this Agreement and hereby further
      agrees  that,  in the event of any  action  for  specific  performance  in
      respect of such  breach,  it shall waive the defense  that a remedy at law
      would be adequate.

            (b) Compliance. Each Holder covenants and agrees that it will comply
      with  the  prospectus  delivery  requirements  of  the  Securities  Act as
      applicable  to it in  connection  with  sales  of  Registrable  Securities
      pursuant to the Registration Statement.

            (c) Discontinued Disposition.  Each Holder agrees by its acquisition
      of such  Registrable  Securities  that,  upon receipt of a notice from the
      Company of the  occurrence  of any event of the kind  described in Section
      3(c),  such  Holder  will  forthwith   discontinue   disposition  of  such
      Registrable   Securities  under  the  Registration  Statement  until  such
      Holder's  receipt  of the  copies of the  supplemented  Prospectus  and/or
      amended  Registration  Statement  or until it is advised  in writing  (the
      "Advice") by the Company that the use of the applicable  Prospectus may be
      resumed,  and, in either case,  has received  copies of any  additional or
      supplemental filings that are incorporated or deemed to be incorporated by
      reference in such Prospectus or Registration  Statement.  The Company will
      use its best  efforts  to  ensure  that the use of the  Prospectus  may be
      resumed as promptly as it practicable. The Company agrees and acknowledges
      that any periods  during which the Holder is required to  discontinue  the
      disposition of the  Registrable  Securities  hereunder shall be subject to
      the provisions of Section 2(b).

                                       10
<PAGE>

            (d)  Amendments  and  Waivers.  The  provisions  of this  Agreement,
      including the provisions of this sentence, may not be amended, modified or
      supplemented,  and waivers or consents to departures  from the  provisions
      hereof may not be given, unless the same shall be in writing and signed by
      the  Company  and  each  Holder  of  the  then   outstanding   Registrable
      Securities.

            (e)  Notices.  Any  and  all  notices  or  other  communications  or
      deliveries required or permitted to be provided hereunder shall be made in
      accordance with the provisions of the Purchase Agreement.

            (f)  Successors  and  Assigns.  This  Agreement  shall  inure to the
      benefit of and be binding upon the  successors  and  permitted  assigns of
      each of the parties and shall  inure to the benefit of each  Holder.  Each
      Holder may assign their  respective  rights hereunder in the manner and to
      the Persons as permitted under the Purchase Agreement.

            (g) Execution and  Counterparts.  This  Agreement may be executed in
      any number of counterparts, each of which when so executed shall be deemed
      to be an original and, all of which taken  together  shall  constitute one
      and the same  Agreement.  In the event that any  signature is delivered by
      facsimile  transmission,  such  signature  shall  create  a valid  binding
      obligation of the party  executing  (or on whose behalf such  signature is
      executed)  the same with the same  force and  effect as if such  facsimile
      signature were the original thereof.

            (h)  Governing  Law.  All  questions  concerning  the  construction,
      validity,  enforcement  and  interpretation  of this  Agreement  shall  be
      determined with the provisions of the Purchase Agreement.

            (i) Cumulative Remedies. The remedies provided herein are cumulative
      and not exclusive of any remedies provided by law.

            (j) Severability. If any term, provision, covenant or restriction of
      this Agreement is held by a court of competent jurisdiction to be invalid,
      illegal,  void or unenforceable,  the remainder of the terms,  provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected,  impaired or invalidated,  and the
      parties hereto shall use their commercially reasonable efforts to find and
      employ an alternative  means to achieve the same or substantially the same
      result  as  that  contemplated  by  such  term,  provision,   covenant  or
      restriction.  It is hereby  stipulated and declared to be the intention of
      the parties that they would have executed the remaining terms, provisions,
      covenants  and  restrictions  without  including  any of such  that may be
      hereafter declared invalid, illegal, void or unenforceable.

                                       11
<PAGE>

            (k) Headings.  The headings in this Agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

            (l)  Independent  Nature of Holders'  Obligations  and  Rights.  The
      obligations  of each Holder  hereunder  are several and not joint with the
      obligations  of any  other  Holder  hereunder,  and  no  Holder  shall  be
      responsible in any way for the performance of the obligations of any other
      Holder  hereunder.  Nothing  contained herein or in any other agreement or
      document  delivered  at any  closing,  and no action  taken by any  Holder
      pursuant hereto or thereto, shall be deemed to constitute the Holders as a
      partnership,  an association, a joint venture or any other kind of entity,
      or create a presumption  that the Holders are in any way acting in concert
      with respect to such obligations or the transactions  contemplated by this
      Agreement.  Each  Holder  shall be  entitled  to protect  and  enforce its
      rights,  including  without  limitation  the  rights  arising  out of this
      Agreement, and it shall not be necessary for any other Holder to be joined
      as an additional party in any proceeding for such purpose.

                            *************************

                                       12
<PAGE>

      IN WITNESS  WHEREOF,  the parties have executed this  Registration  Rights
Agreement as of the date first written above.

                                       WORKSTREAM, INC.

                                       By: /s/ Michael Mullarkey
                                           -------------------------------------
                                               Name: Michael Mullarkey
                                               Title: Chairman and CEO

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       13
<PAGE>

          [PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

Name of Investing Entity: Rubicon Master Fund
                          ------------------------------------------------------

Signature of Authorized Signatory of
Investing entity:                             /s/ Jeffrey Eugene Brummette
                                              ----------------------------------

Name of Authorized Signatory:  Jeffrey Eugene Brummette
                              -----------------------------------------

Title of Authorized Signatory: Partner
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                                       14
<PAGE>

          [PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

Name of Investing Entity:  Union Spring Fund Ltd.
                          ------------------------------------------------------

Signature of Authorized Signatory of Investing entity:  /s/ Steven R. Crane
                                                       -------------------------

Name of Authorized Signatory:  Steven R. Crane
                              --------------------------------------------------

Title of Authorized Signatory: Director
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                                       15
<PAGE>

          [PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

Name of Investing Entity: SUNRISE FOUNDATION TRUST

Signature of Authorized Signatory of Investing entity: /s/ Nathan A. Low

Name of Authorized Signatory: Nathan A. Low

Title of Authorized Signatory: __________________________

<PAGE>

Name of Investing Entity: Nathan A. Low

Signature of Authorized Signatory of Investing entity: /s/ Nathan A. Low

Name of Authorized Signatory: Nathan A. Low

Title of Authorized Signatory: __________________________

<PAGE>

Name of Investing Entity: SUNRISE EQUITY PARTNERS, LP

Signature of Authorized Signatory of Investing entity: /s/ Marilyn Adler

Name of Authorized Signatory: Marilyn Adler

Title of Authorized Signatory: Manager of Level Counter, LLC, the general
partner of Sunrise Equity Partners, LP.

                           [SIGNATURE PAGES CONTINUE]

                                       16
<PAGE>

                                     ANNEX A

                              Plan of Distribution

         The common shares which may be sold by the selling shareholders and any
of their pledgees, donees, transferees or other successors-in-interest, may be
disposed of from time to time in one or more transactions, which may involve:

            o ordinary  brokerage  transactions  and  transactions  in which the
broker solicits purchasers;

            o sales on the NASDAQ Small Cap Market,  Boston Stock  Exchange,  or
any other principal market on which the common shares trade at the time of sale,
including directly with a market maker acting as principal;

            o privately-negotiated  transactions,  which include direct sales to
purchasers and sales effected through agents;

            o a block trade in which the broker or dealer  will  attempt to sell
the common shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

            o purchases  by a broker or dealer as  principal  and resale by that
broker or dealer for its own account;

            o an  exchange  distribution  in  accordance  with the rules of that
exchange or transactions in the over-the-counter market;

            o short sales;

            o the pledge of the security for any loan or  obligation,  including
pledges to brokers or dealers  who may,  from time to time,  themselves  sell or
transfer the common shares or their interest in such securities;

            o the transfer of the common shares by the selling  shareholders  to
their partners, members or shareholders;

            o a combination of any of the above; or

            o any other method permitted by applicable law.

      The sale price of the common shares pursuant to the prospectus may be:

            o a fixed price;

            o the market price prevailing at the time of sale;

            o a price related to such prevailing market price;

                                       17
<PAGE>

            o a negotiated price; or

            o at any other  prices as the selling  shareholders  may  determine,
including sales below the market price.

      The selling  shareholders may engage  broker-dealers to participate in the
sales. Such broker-dealers may receive  compensation in the form of underwriting
discounts,  concessions or commissions from the selling  shareholders and/or the
purchasers  of the  shares for whom  broker-dealers  may act as agent or to whom
they may sell as  principals  or both  (which  compensation  as to a  particular
broker-dealer may be less than or in excess of customary commissions).

      In addition,  the selling shareholders may enter into hedging transactions
with  broker-dealers  who may engage in short sales of our common  shares in the
course of hedging the positions they assume with the selling  shareholders.  The
selling  shareholders  may also enter  into  option or other  transactions  with
broker-dealers  that require the delivery to such  broker-dealers  of our common
shares, which shares may be resold thereafter pursuant to the prospectus.

      The common shares  covered by the  prospectus  may also be sold in private
transactions  pursuant to Rule 144 under the Securities Act of 1933, rather than
pursuant to the prospectus.  The selling shareholders have the sole and absolute
discretion  not to  accept  any  purchase  offer or make any sale of the  common
shares if they deem the purchase  price to be  unsatisfactory  at any particular
time.

      In  order to  comply  with  the  securities  laws of  certain  states,  if
applicable,  the common  shares may be sold in such  jurisdictions  only through
registered or licensed brokers or dealers.  In addition,  in certain states, the
common  shares  may not be sold  unless  such  shares  have been  registered  or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.

      Selling  shareholders  that are broker dealers are statutory  underwriters
under the Securities Act of 1933.  Selling  shareholders  that are affiliates of
broker  dealers  purchased the shares in the ordinary  course of business and at
the time of purchase the seller had no agreements or understandings, directly or
indirectly,   with  any  person  to   distribute   the  shares.   Under  certain
circumstances,  the  selling  shareholders  and any  broker-dealers  that act in
connection  with the sales of the  shares  may be  deemed  to be  "underwriters"
within the  meaning  of Section  2(11) of the  Securities  Act of 1933,  and any
commissions  received  by them  and any  profit  on the  sale of the  shares  as
principals may be deemed to be underwriting  discounts and commissions under the
Securities Act of 1933. Selling  shareholders who are "underwriters"  within the
meaning of Section  2(11) of the  Securities  Act of 1933 will be subject to the
prospectus delivery requirements of the Securities Act of 1933.

                                       18
<PAGE>

ANNEX B

                                 WORKSTREAM INC.
                                 (the "Company")

                    QUESTIONNAIRE TO THE SELLING SHAREHOLDERS

      This Questionnaire is to be completed,  signed and faxed to Scott Brucker,
Esquire at  215-701-2410  by no later than  December __, 2004,  by the person or
entity indicated on the cover of this Questionnaire (the "Selling  Shareholder")
whose  common  shares  of  the  Company  are  being  registered  pursuant  to  a
Registration Statement on Form S-3. Retain a duplicate copy for your files.

      If you are uncertain about any of the following questions as they apply to
your situation,  please supply all relevant facts.  Include separate sheets with
details  if  necessary.  If you have any  questions,  please  call  Workstream's
counsel, Scott Brucker, Esquire, at (215) 665-3710.

      Please notify me immediately if any of the  information  disclosed in your
answers  changes.   Please  answer  all  questions.   Indicate  "none"  or  "not
applicable" when appropriate. Information should be given as of the date of this
Questionnaire, even if previously reported to the Company.

      IN ANSWERING  THESE  QUESTIONS,  PLEASE REFER TO THE  INSTRUCTIONS  AT THE
BEGINNING OF THIS QUESTIONNAIRE.

David Polansky                                          Dated: December __, 2004
Chief Financial Officer
Workstream Inc.
2600 Lake Lucien Drive, Suite 410
Maitland, Florida 32751

      Name of Selling Shareholder: _________________________________

                                       19
<PAGE>

                          Instructions and Definitions

      The following  instructions  and  definitions  are furnished to aid you in
preparing your answers to this Questionnaire.

      1.    For  purposes  of  this   Questionnaire  the  term  "Company"  means
            Workstream Inc.

      2.    "Beneficial"  ownership.  The SEC has taken the position that if you
            have sole or shared voting power or dispositive power or the ability
            to acquire  either sole or shared voting or  dispositive  power of a
            security  within  60  days,  you are the  beneficial  owner  of that
            security,  even though that security is not registered in your name.
            Thus, for example,  you could be the beneficial  owner of securities
            in a trust or estate of which you are a trustee or  executor,  or of
            which you are one of the trustees or executors,  or you could be the
            beneficial owner of securities which you have a right to purchase.

      3.    The term  "affiliate" for purposes of this  Questionnaire  means any
            person directly or indirectly  controlling,  controlled by, or under
            common control with the Selling Shareholder.

      4.    An example  response  has been  provided to assist you in  preparing
            your response.

                                       20
<PAGE>

      1.    Broker-Dealer Status.

      (a) Are you, or are you an affiliate of, a broker-dealer  registered under
the Securities Exchange Act of 1934?

                         Yes |_|                 No |_|

      If "yes," please give details below.

      (b)  Please  confirm  the  following   statement:   The  Company's  equity
securities that are being purchased by you were purchased in the ordinary course
of your business,  and at the time the securities  were  purchased,  you did not
have any agreement or understanding,  directly or indirectly, with any person to
distribute the securities.

                Confirmed |_|                 Cannot Confirm |_|

      If "cannot confirm," please give details below.

      2.    Relationships with the Company.

      (a)  Have  you  held  any  position  or  office  with  the  Company,   its
predecessors or affiliates within the last three years?

                         Yes |_|                 No |_|

      If "yes," please give details below.

                                       21
<PAGE>

      (b) Have you had any other  material  relationship  with the Company,  its
predecessors or affiliates within the last three years?

                         Yes |_|                 No |_|

      If "yes," please give details below.

3.    Equity Securities Beneficially Owned By You.

      (a) Please state the number and type of equity  securities  of the Company
beneficially owned (please see instructions and definitions on page 2) by you as
of the date of this Questionnaire, including securities which are exercisable or
convertible  into  equity  securities  within  60  days  of  the  date  of  this
Questionnaire.

Class                                                         Number of Shares
of Security                                                   Beneficially Owned
-----------                                                   ------------------

      (b) If any natural  person or entity other than you holds or shares voting
power or  dispositive  power with  respect to the  Company's  equity  securities
listed in  response to Question  3(a),  please  provide the names of the natural
persons  (including  titles) or entities that hold or share such voting power or
dispositive  power and indicate the number of the  Company's  equity  securities
covered thereby.

                                       22
<PAGE>

      (c) With respect to the Company's equity  securities listed in response to
Questions  3(a) and 3(b) for which an entity  holds or  shares  voting  power or
dispositive  power,  please provide the names of the natural persons  (including
titles) or entities  that  control the entity or entities  listed in response to
Questions 3(a) and 3(b).

      (d) Please  continue to list the natural  persons or entities that control
the  entities  listed in response to Question  3(c) and the  entities  listed in
response  to this  Question  3(d) until you have  listed  only  natural  persons
(including titles) that control the applicable entity or entities.

      (e) If any person or entity disclaims  beneficial  ownership of any of the
equity securities you have listed in response to Question 3, please so indicate:

                                       23
<PAGE>

                                EXAMPLE RESPONSE

The  following  is an example of a response to items 1 through 3. Please  assume
ABC Corporation is the Selling Shareholder for purposes of this example.

1.    Broker-Dealer Status.

      ABC  Corporation  is an  affiliate  of a  broker-dealer  because  its sole
shareholder, DEF Corporation, is a broker-dealer.

2.    Relationships with the Company.

      (a) ABC  Corporation has not held any position or office with the Company,
its predecessors or affiliates within the last three years.

      (b) ABC Corporation  provided  consulting services to the Company in March
2002.

3.    Equity Securities Beneficially Owned By You.

Question 3(a).

Class                                                         Number of Shares
of Security                                                   Owned Beneficially
-----------                                                   -----------------
Common Shares                                                       100,000

Warrants to purchase Common Shares                                  200,000

Question 3(b).

      Not applicable

Question 3(c).

      ABC Corporation is controlled by DEF Corporation,  ABC Corporation's  sole
shareholder.

Question 3(d).

      DEF Corporation is controlled by XYZ Corporation,  DEF Corporation's  sole
shareholder.  XYZ Corporation is controlled by John Doe, XYZ Corporation's  sole
shareholder and its President and Chief Executive Officer.

Question 3(e).

      John Doe disclaims  beneficial  ownership of the 100,000 Common Shares and
the Warrants to purchase 200,000 Common Shares.

                                       24
<PAGE>

      The undersigned hereby acknowledges that the information  contained herein
is true to the best of his knowledge and will notify the Company  immediately of
any changes in such information.

DATED: December ____, 2004            FOR INDIVIDUALS:

                                      ------------------------------------------
                                      Name of Selling Shareholder [please print]

                                      ------------------------------------------
                                      Signature

                                      FOR CORPORATIONS, PARTNERSHIPS OR TRUSTS:

                                      ------------------------------------------
                                      Name of Selling Shareholder [please print]

                                      By:_________________________________
                                               Signature

                                          Name:___________________________
                                                    [please print]

                                          Title:____________________________
                                                  [please print]

                                       25COMMON STOCK PURCHASE WARRANT

THE WARRANT  REPRESENTED BY THIS  CERTIFICATE HAS NOT BEEN REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),  AND IS SUBJECT TO  RESTRICTIONS
ON  TRANSFERABILITY  AS SET FORTH IN THIS  CERTIFICATE.  THIS WARRANT MAY NOT BE
SOLD,  TRANSFERRED,  OR  OTHERWISE  DISPOSED OF IN THE  ABSENCE OF AN  EFFECTIVE
REGISTRATION  STATEMENT  UNDER  THE ACT OR AN  OPINION  OF  COUNSEL,  REASONABLY
ACCEPTABLE  TO COUNSEL FOR THE COMPANY,  TO THE EFFECT THAT THE  PROPOSED  SALE,
TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT.

                                 WORKSTREAM INC.

                               WARRANT CERTIFICATE

      THIS WARRANT  CERTIFICATE (the "Warrant  Certificate")  certifies that for
value received,  ____________ (the "Holder"),  is the owner of this warrant (the
"Warrant"),  which  entitles the Holder to purchase at any time on or before the
Expiration  Date (as defined below)  _____________________  (__________)  shares
(the "Warrant Shares") of fully paid  non-assessable  shares of the common stock
(the  "Common  Stock"),   of  WORKSTREAM  INC.,  a  Canadian   corporation  (the
"Company"),  at a  purchase  price of $3.50 per  Warrant  Share  (the  "Purchase
Price"),  in lawful  money of the United  States of America by bank or certified
check,  subject to adjustment as  hereinafter  provided.  This Warrant is issued
pursuant to the Securities  Purchase Agreement (the "Purchase  Agreement") dated
of even date among the  Company and the  Purchasers  thereunder,  including  the
Holder.  Capitalized  terms not otherwise defined herein shall have the meanings
ascribed to them in the Purchase Agreement.

1. WARRANT; PURCHASE PRICE.

      This Warrant  shall  entitle the Holder to purchase the Warrant  Shares at
the  Purchase  Price.  The  Purchase  Price  and the  number of  Warrant  Shares
evidenced by this Warrant  Certificate  are subject to adjustment as provided in
Article 6.

2. EXERCISE; EXPIRATION DATE.

      (a) This Warrant is exercisable,  at the option of the Holder, at any time
after the date of  issuance  and on or before the  Expiration  Date (as  defined
below)  by (i)  delivering  to the  Company  written  notice  of  exercise  (the
"Exercise  Notice"),  stating  the  number of  Warrant  Shares  to be  purchased
thereby,  accompanied  by bank or  certified  check  payable to the order of the
Company for the Warrant  Shares being  purchased  provided,  however,  that this
Warrant  may not be  converted  prior  to the  effectiveness  of a  registration
statement with the Securities Exchange Commission for the Warrant Shares. Within
ten  (10)  business  days  of  the  Company's  receipt  of the  Exercise  Notice
accompanied by the  consideration  for the Warrant Shares being  purchased,  the
Company  shall issue and deliver to the Holder a  certificate  representing  the
Warrant Shares being purchased. In the case of exercise for less than all of the
Warrant Shares represented by this Warrant Certificate, the Company shall cancel
this  Warrant  Certificate  upon the  surrender  thereof  and shall  execute and
deliver a new Warrant Certificate for the balance of such Warrant Shares.

<PAGE>

      (b) Expiration.  The term "Expiration  Date" shall mean 5:00 p.m.,  Ottawa
time,  on  December  31,  2008 or if such date shall in the  Province of Ontario
shall be a holiday or a day on which banks are  authorized  to close,  then 5:00
p.m.,  Ottawa time,  the next  following day which in the Province of Ontario is
not a holiday or a day on which banks are authorized to close.

3. RESTRICTIONS ON TRANSFER.

      (a)  Restrictions.  This  Warrant,  and the  Warrant  Shares  or any other
security   issuable   upon  exercise  of  this  Warrant  may  not  be  assigned,
transferred,  sold,  or  otherwise  disposed  of unless (i) there is in effect a
registration  statement  under the Act covering  such sale,  transfer,  or other
disposition  or (ii) the Holder  furnishes to the Company an opinion of counsel,
reasonably  acceptable  to  counsel  for the  Company,  to the  effect  that the
proposed  sale,   transfer,   or  other  disposition  may  be  effected  without
registration under the Act, as well as such other documentation incident to such
sale,  transfer,  or other disposition as the Company's counsel shall reasonably
request.

      (b) Legend.  Any Warrant  Shares  issued upon the exercise of this Warrant
shall bear the following or similar legend:

      "The shares  evidenced by this  certificate were issued upon exercise of a
      Warrant and may not be sold, transferred,  or otherwise disposed of in the
      absence of an effective registration under the Securities Act of 1933 (the
      "Act") or an opinion of counsel,  reasonably acceptable to counsel for the
      Company,  to the effect that the proposed sale,  transfer,  or disposition
      may be effectuated without registration under the Act."

4. RESERVATION OF SHARES.

      The Company  covenants that it will at all time reserve and keep available
out of its  authorized  Common  Stock,  solely for the purpose of issuance  upon
exercise of this Warrant, such number of shares of Common Stock as shall then be
issuable  upon the  exercise of this  Warrant.  The Company  covenants  that all
shares of Common  Stock which shall be issuable  upon  exercise of this  Warrant
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens, and charges with respect to the issue thereof.

5. LOSS OR MUTILATION.

      If the Holder loses this Warrant, or if this Warrant is stolen,  destroyed
or mutilated,  the Company shall issue an identical replacement Warrant upon the
Holder's  delivery to the  Company of a customary  agreement  to  indemnify  the
Company for any losses resulting from the issuance of the replacement Warrant.

                                       2
<PAGE>

6. ANTI-DILUTION PROVISIONS.

      (a) Stock  Dividends,  Subdivisions and  Combinations.  If at any time the
Company shall:

            (i) take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend  payable in, or other  distribution  of,
additional shares of Common Stock,

            (ii) subdivide its outstanding  shares of Common Stock into a larger
number of shares of Common Stock, or

            (iii) combine its outstanding  shares of Common Stock into a smaller
number of shares of Common Stock,

then (A) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable  into  immediately  after the  occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock which a record  holder of
the same number of shares of Common Stock for which this Warrant is  exercisable
into immediately  prior to the occurrence of such event would own or be entitled
to receive after the happening of such event,  and (B) the Purchase  Price shall
be adjusted to equal (x) the current  Purchase  Price  immediately  prior to the
adjustment  multiplied  by the  number of shares of Common  Stock for which this
Warrant is exercisable into immediately  prior to the adjustment  divided by (y)
the number of shares of Common Stock for which this Warrant is exercisable  into
immediately after such adjustment.

      (b) Certain Other  Distributions.  If at any time the Company shall take a
record of the holders of its Common Stock for the purpose of  entitling  them to
receive any dividend or other distribution of:

            (i) cash  (other  than a cash  dividend  payable  out of earnings or
earned surplus legally  available for the payment of dividends under the laws of
the jurisdiction of incorporation of the Company),

            (ii) any evidences of its  indebtedness,  any shares of stock of any
class or any other securities or property of any nature  whatsoever  (other than
cash, convertible securities or additional shares of Common Stock), or

            (iii) any warrants or other rights to subscribe  for or purchase any
evidences  of its  indebtedness,  any  shares of stock of any class or any other
securities or property of any nature  whatsoever  (other than cash,  convertible
securities or additional shares of Common Stock),

then (A) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable  into shall be adjusted to equal the product of the number of shares
of Common Stock for which this Warrant is exercisable into immediately  prior to
such  adjustment  by a fraction (x) the  numerator of which shall be the current
Purchase  Price per share of Common  Stock at the date of taking such record and
(y) the  denominator  of which shall be such  current  Purchase  Price minus the
amount  allocable to one share of Common Stock of any such cash so distributable
and of the fair value (as  determined in good faith by the Board of Directors of
the  Company) of any and all such  evidences of  indebtedness,  shares of stock,
other  securities  or property or  warrants  or other  subscription  or purchase
rights so  distributable,  and (B) the Purchase Price shall be adjusted to equal
(x) the Purchase  Price  multiplied  by the number of shares of Common Stock for
which this  Warrant is  exercisable  into  immediately  prior to the  adjustment
divided  by (y) the number of shares of Common  Stock for which this  Warrant is
exercisable into immediately after such adjustment.  A  reclassification  of the
Common  Stock  (other  than a change in par  value,  or from par value to no par
value or from no par value to par value) into shares of Common  Stock and shares
of any other class of stock shall be deemed a distribution by the Company to the
holders of its Common  Stock of such shares of such other class of stock  within
the meaning of this Section 6(b) and, if the outstanding  shares of Common Stock
shall be changed into a larger or smaller  number of shares of Common Stock as a
part of such  reclassification,  such change  shall be deemed a  subdivision  or
combination,  as the case may be, of the  outstanding  shares  of  Common  Stock
within the meaning of Section 6(a).

                                       3
<PAGE>

      (c) Issuance of Additional Shares of Common Stock.

            (i) If at any time the Company  shall  issue or sell any  additional
shares of Common Stock in exchange for consideration in an amount per additional
share of Common  Stock  less  than the  current  Purchase  Price at the time the
additional  shares of  Common  Stock are  issued or sold,  then (A) the  current
Purchase Price shall be reduced to a price  determined by dividing (x) an amount
equal  to the sum of (1) the  number  of  shares  of  Common  Stock  outstanding
immediately  prior to such issue or sale multiplied by the then existing current
Purchase Price, plus (2) the consideration, if any, received by the Company upon
such  issue  or  sale,  by (y) the  total  number  of  shares  of  Common  Stock
outstanding  immediately  after such issue or sale; and (B) the number of shares
of Common Stock for which this Warrant is exercisable  into shall be adjusted to
equal the product  obtained by multiplying the current  Purchase Price in effect
immediately  prior to such issue or sale by the number of shares of Common Stock
for which this Warrant is exercisable  into  immediately  prior to such issue or
sale and dividing the product  thereof by the current  Purchase Price  resulting
from the adjustment made pursuant to clause (i).

            (ii) If the Company  shall at any time issue or sell any  additional
shares of Common Stock in exchange for consideration in an amount per additional
share of  Common  Stock  less than the  Current  Market  Price  (as  hereinafter
defined) at the time the  additional  shares of Common Stock are issued or sold,
then (A) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable  into shall be adjusted to equal the product obtained by multiplying
the number of shares of Common Stock for which this Warrant is exercisable  into
immediately prior to such issue or sale by a fraction (x) the numerator of which
shall be the number of shares of Common Stock outstanding immediately after such
issue or sale, and (y) the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issue or sale plus the number
of  shares  which  the  aggregate  offering  price of the  total  number of such
additional  shares of Common  Stock would  purchase at the then  Current  Market
Price;  and (B) the current  Purchase Price as to the number of shares for which
this Warrant is exercisable  into prior to such adjustment  shall be adjusted by
multiplying such current Purchase Price by a fraction (a) the numerator of which
shall be the  number of shares  for  which  this  Warrant  is  exercisable  into
immediately  prior to such issue or sale; and (b) the denominator of which shall
be the number of shares of Common Stock purchasable immediately after such issue
or sale.

                                       4
<PAGE>

            (iii)  "Current  Market  Price"  means,  in  respect of any share of
Common Stock on any date herein  specified,  if there shall not then be a public
market for the Common Stock, the value per share of Common Stock at such date as
is  determined  in the good  faith  judgment  of the Board of  Directors  of the
Company,  or if there shall then be a public  market for the Common  Stock,  the
average of the daily market  prices for 10  consecutive  business days ending on
the  business  day  prior to such  date.  The daily  market  price for each such
business day shall be (i) the last sale price on such day on the principal stock
exchange on which such Common Stock is then listed or admitted to trading,  (ii)
if no sale takes place on such day on any such exchange, the average of the last
reported  closing bid and asked prices on such day as  officially  quoted on any
such  exchange,  (iii) if the Common  Stock is not then  listed or  admitted  to
trading on any stock exchange,  the average of the last reported closing bid and
asked  prices on such day in the  over-the-counter  market,  as furnished by the
National  Association of Securities  Dealers  Automated  Quotation System or the
National Quotation Bureau, Inc., (iv) if neither such corporation at the time is
engaged in the  business of reporting  such prices,  as furnished by any similar
firm  then  engaged  in such  business,  or (v) if  there  is no such  firm,  as
furnished by any member of the NASD selected mutually by the holders of at least
50% of the  aggregate  principal  amount of the  Warrants and the Company or, if
they cannot agree upon such  selection,  as furnished by two such members of the
NASD, one of which shall be selected by holders of at least 50% of the aggregate
principal  amount of the  Warrants  and one of which  shall be  selected  by the
Company.  (iv) If at any time the  Company  shall  issue or sell any  additional
shares of Common Stock in exchange for consideration in an amount per additional
shares of Common Stock which is less than the current Purchase Price and Current
Market  Price at the time the  additional  shares of Common  Stock are issued or
sold, the adjustment required under Section 6(c)(i) or 6(c)(ii) shall be made in
accordance with the formula contained therein which results in the lower current
Purchase Price following such adjustment.  The provisions of paragraphs  6(c)(i)
and  6(c)(ii)  shall not apply to any  issuance of  additional  shares of Common
Stock for  which an  adjustment  is  provided  under  Section  6(a) or 6(b).  No
adjustment  of the number of shares of Common Stock for which this Warrant shall
be exercisable  into shall be made under paragraph  6(c)(i) or 6(c)(ii) upon the
issuance of any additional  shares of Common Stock which are issued  pursuant to
the  exercise  of any  warrants  or other  subscription  or  purchase  rights or
pursuant to the exercise of any purchase or exchange  rights in any  convertible
securities,  if any such  adjustment  shall  previously  have been made upon the
issuance  of such  warrants  or  other  rights  or  upon  the  issuance  of such
convertible  securities  (or upon the  issuance of any  warrant or other  rights
therefore) pursuant to Section 6(d) or Section 6(e).

      (d) Issuance of Warrants or Other Rights. If at any time the Company shall
take a record of the holders of its Common  Stock for the  purpose of  entitling
them to receive a distribution  of, or shall in any manner (whether  directly or
by  assumption  in a merger in which the Company is the  surviving  corporation)
issue or sell,  any warrants or other  rights to  subscribe  for or purchase any
additional shares of Common Stock or any convertible securities,  whether or not
the rights to exchange or convert  thereunder are immediately  exercisable,  and
the price per share for which Common Stock is issuable upon the exercise of such
warrants or other  rights or upon  conversion  or  exchange of such  convertible
securities  shall be less than the current  Purchase Price or the Current Market
Price in effect  immediately  prior to the time of such issue or sale,  then the
number of shares for which  this  Warrant is  exercisable  into and the  current
Purchase  Price shall be adjusted as provided in Section  6(c) on the basis that
the maximum number of additional shares of Common Stock issuable pursuant to all
such warrants or other rights or necessary to effect the  conversion or exchange
of all such  convertible  securities  shall be deemed to have  been  issued  and
outstanding and the Company shall have received all of the consideration payable
therefore,  if any, as of the date of the actual  issuance  of such  warrants or
other  rights.  If the  maximum  number of  additional  shares  of Common  Stock
necessary to effect the conversion or exchange is  indeterminable as a result of
a conversion or exercise  price which  adjusts over time  (whether  based on the
Market Price of the Common Stock or otherwise), the determination of adjustments
pursuant  to this  Section  6(d)  shall  be  determined  at the  time of  actual
conversion or exercise of such convertible securities and an adjustment shall be
made only upon actual  conversions  or  exchanges  which are below the  Purchase
Price or the Current  Market  Price on the date of issuance of such  Convertible
Securities.  No further  adjustments of the current Purchase Price shall be made
upon the actual  issue of such Common  Stock or of such  convertible  securities
upon  exercise of such warrants or other rights or upon the actual issue of such
Common Stock upon such conversion or exchange of such convertible securities.

                                       5
<PAGE>

      (e) Issuance of Convertible  Securities.  If at any time the Company shall
take a record of the holders of its Common  Stock for the  purpose of  entitling
them to receive a distribution  of, or shall in any manner (whether  directly or
by  assumption  in a merger in which the Company is the  surviving  corporation)
issue or sell, any convertible securities, whether or not the rights to exchange
or convert thereunder are immediately  exercisable,  and the price per share for
which Common Stock is issuable upon such  conversion  or exchange  shall be less
than the current  Purchase Price or Current  Market Price in effect  immediately
prior to the time of such  issue or sale,  then the  number  of shares of Common
Stock for which this Warrant is exercisable  into and the current Purchase Price
shall be  adjusted  as  provided  in Section  6(c) on the basis that the maximum
number of additional  shares of Common Stock  necessary to effect the conversion
or  exchange  of all such  convertible  securities  shall be deemed to have been
issued  and  outstanding  and  the  Company  shall  have  received  all  of  the
consideration  payable  therefore,  if any, as of the date of actual issuance of
such  convertible  securities.  If the maximum  number of  additional  shares of
Common Stock necessary to effect the conversion or exchange is indeterminable as
a result of a conversion  or exercise  price which  adjusts  over time  (whether
based on the Market Price of the Common Stock or otherwise),  the  determination
of adjustments  pursuant to this Section 6(e) shall be determined at the time of
actual  conversion or exercise of such convertible  securities and an adjustment
shall be made only upon  actual  conversions  or  exchanges  which are below the
Purchase  Price or the  Current  Market  Price on the date of  issuance  of such
Convertible Securities.  No further adjustment of the number of shares of Common
Stock for which this Warrant is exercisable  into and the current Purchase Price
shall be made under  this  Section  6(e) upon the  issuance  of any  convertible
securities  which are issued  pursuant to the  exercise of any warrants or other
subscription  or  purchase  rights  therefore,  if  any  such  adjustment  shall
previously  have been made upon the  issuance of such  warrants or other  rights
pursuant  to Section  6(d).  No further  adjustments  of the number of shares of
Common Stock for which this Warrant is exercisable into and the current Purchase
Price shall be made upon the actual issue of such Common  Stock upon  conversion
or exchange of such convertible securities.

                                       6
<PAGE>

      (f) Superseding Adjustment.

            (i) If, at any time after any  adjustment of the number of shares of
Common Stock for which this Warrant is exercisable into and the current Purchase
Price  shall  have been made  pursuant  to Section  6(d) or Section  6(e) as the
result of any issuance of warrants, other rights or convertible securities, then
(x) such  warrants or other  rights,  or the right of  conversion or exchange in
such other convertible  securities,  shall expire,  and all or a portion of such
warrants or other rights, or the right of conversion or exchange with respect to
all or a portion of such other convertible securities,  as the case may be shall
not have been exercised,  or (y) the consideration per share for which shares of
Common  Stock are issuable  pursuant to such  warrants or other  rights,  or the
terms of such other convertible securities,  shall be increased solely by virtue
of provisions  therein contained for an automatic increase in such consideration
per share  upon the  occurrence  of a  specified  date or  event,  then any such
previous  adjustments  to this Warrant  shall be rescinded  and annulled and the
additional  shares of Common  Stock  which  were  deemed to have been  issued by
virtue of the  computation  made in connection  with the adjustment so rescinded
and  annulled  shall no longer  be deemed to have been  issued by virtue of such
computation.

            (ii) Upon the occurrence of an event set forth in Section 6(f) above
there  shall be, a  recomputation  made of the  effect of such  warrants,  other
rights or options or other convertible  securities on the basis of: (a) treating
the  number of  additional  shares of Common  Stock or other  property,  if any,
theretofore actually issued or issuable pursuant to the previous exercise of any
such warrants or other rights or any such right of  conversion  or exchange,  as
having  been  issued  on the  date or dates  of any  such  exercise  and for the
consideration  actually received and receivable  therefor,  and (b) treating any
such  warrants or other rights or any such other  convertible  securities  which
then remain  outstanding as having been granted or issued  immediately after the
time of such increase of the  consideration per share for which shares of Common
Stock or other  property  are  issuable  under such  warrants or other rights or
other convertible securities; whereupon a new adjustment of the number of shares
of Common Stock for which this Warrant and the current  Purchase  Price shall be
made, which new adjustment shall supersede the previous  adjustment so rescinded
and annulled.

      (g) Other Provisions  Applicable to Adjustments.  The following provisions
shall be  applicable  to the  making of  adjustments  of the number of shares of
Common Stock for which this Warrant is exercisable into and the current Purchase
Price provided for in this Section 6:

            (i) Computation of Consideration.  To the extent that any additional
shares of Common Stock or any  convertible  securities  or any warrants or other
rights to subscribe for or purchase any additional shares of Common Stock or any
convertible securities shall be issued for cash consideration, the consideration
received by the Company therefor shall be the amount of the cash received by the
Company  therefor,  or, if such additional shares of Common Stock or convertible
securities are offered by the Company for subscription,  the subscription price,
or, if such additional shares of Common Stock or convertible securities are sold
to underwriters or dealers for public offering without a subscription  offering,
the initial public offering price (in any such case subtracting any amounts paid
or receivable for accrued interest or accrued  dividends and without taking into
account any compensation,  discounts or expenses paid or incurred by the Company
for and in the  underwriting  of, or otherwise in connection  with, the issuance
thereof).  To the extent that such issuance shall be for a  consideration  other
than cash, then, except as herein otherwise  expressly  provided,  the amount of
such consideration shall be deemed to be the fair value of such consideration at
the time of such  issuance as determined in good faith by the Board of Directors
of the Company. In case any additional shares of Common Stock or any convertible
securities  or any warrants or other rights to  subscribe  for or purchase  such
additional  shares of Common Stock or convertible  securities shall be issued in
connection  with any  merger in which the  Company  issues any  securities,  the
amount  of  consideration  therefor  shall be deemed  to be the fair  value,  as
determined  in good  faith by the Board of  Directors  of the  Company,  of such
portion of the assets and business of the nonsurviving corporation as such Board
in good faith shall determine to be  attributable  to such additional  shares of
Common Stock, convertible securities,  warrants or other rights, as the case may
be.  The  consideration  for any  additional  shares  of Common  Stock  issuable
pursuant to any warrants or other  rights to subscribe  for or purchase the same
shall be the consideration  received by the Company for issuing such warrants or
other  rights plus the  additional  consideration  payable to the  Company  upon
exercise of such warrants or other rights.  The consideration for any additional
shares  of  Common  Stock  issuable  pursuant  to the  terms of any  convertible
securities  shall be the  consideration  received  by the  Company  for  issuing
warrants  or  other  rights  to  subscribe  for  or  purchase  such  convertible
securities,  plus the consideration paid or payable to the Company in respect of
the  subscription  for or  purchase  of such  convertible  securities,  plus the
additional  consideration,  if any,  payable to the Company upon the exercise of
the right of conversion or exchange in such convertible  securities.  In case of
the issuance at any time of any additional shares of Common Stock or convertible
securities in payment or  satisfaction  of any dividends upon any class of stock
other than Common  Stock,  the Company shall be deemed to have received for such
additional  shares of Common Stock or  convertible  securities  a  consideration
equal to the amount of such dividend so paid or satisfied. Whenever the Board of
Directors of the Company shall be required to make a determination in good faith
of the fair value of any consideration and the fair value of such  consideration
shall be  determined  by the Board of Directors  to equal or exceed  $2,000,000,
such  determination  shall, if requested by the holder of 51% of the outstanding
Warrants issued pursuant to the Purchase  Agreement,  be supported by an opinion
of an investment  banking firm of recognized  national  standing selected by the
holder of this Warrant and acceptable to the Company.

                                       7
<PAGE>

            (ii)  When  Adjustments  to Be Made.  The  adjustments  required  by
Section 6 shall be made whenever and as often as any specified  event  requiring
an adjustment shall occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable  into that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
shares of the Common  Stock,  as  provided  for in Section  6(a)) up to, but not
beyond the date of  exercise if such  adjustment  either by itself or with other
adjustments  not previously made adds or subtracts less than 1% of the shares of
Common Stock for which this Warrant is exercisable into immediately prior to the
making of such  adjustment.  Any  adjustment  representing a change of less than
such minimum  amount (except as aforesaid)  which is postponed  shall be carried
forward and made as soon as such  adjustment,  together  with other  adjustments
required by this Section 6 and not  previously  made,  would result in a minimum
adjustment   or,  if  sooner,   on  the  date  of  exercise.   For  purposes  of
clarification,  upon receipt of any exercise notice in connection therewith, the
Company  shall  make any such  postponed  adjustments  prior to  effecting  such
exercise. For the purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its occurrence.

                                       8
<PAGE>

            (iii)  Fractional  Interests.  In computing  adjustments  under this
Section 6,  fractional  interests in Common Stock shall be taken into account to
the nearest 1/100th of a share.

            (iv) When Adjustment Not Required.

                  (A) If the  Company  shall take a record of the holders of its
Common  Stock  for the  purpose  of  entitling  them to  receive a  dividend  or
distribution or subscription or purchase rights and shall, thereafter and before
the  distribution  to stockholders  thereof,  legally abandon its plan to pay or
deliver such  dividend,  distribution,  subscription  or purchase  rights,  then
thereafter  no  adjustment  shall be  required  by reason of the  taking of such
record  and any such  adjustment  previously  made in respect  thereof  shall be
rescinded and annulled.

                  (B) No adjustment shall be required pursuant to this Section 6
upon:

                  (1) the  exercise  of any  warrants,  options  or  convertible
securities  granted,  issued and  outstanding  on the date of  issuance  of this
Warrant;

                  (2) upon the grant or exercise  of any stock or options  which
may  hereafter be granted or exercised  under any employee  stock option plan of
the Company  now  existing or to be  implemented  in the future,  so long as the
issuance of such stock or options is  approved by a majority of the  independent
members of the Board of Directors of the Company or a majority of the members of
a committee of the independent directors established for such purpose; or

                  (3) the exercise of the Warrants;

            (v) Escrow of Stock.  If after any  property  becomes  distributable
pursuant to this  Section 6 by reason of the taking of any record of the holders
of Common Stock,  but prior to the occurrence of the event for which such record
is taken, and the holder of this Warrant  exercises this Warrant,  any shares of
Common Stock  issuable upon exercise by reason of such event shall be deemed the
last shares of Common Stock for which this Warrant is exercised (notwithstanding
any other  provision to the contrary  herein) and such shares or other  property
shall be held in escrow  for the  holder of this  Warrant  by the  Company to be
issued  to the  holder of this  Warrant  upon and to the  extent  that the event
actually   takes   place,   upon   payment  of  the  current   Purchase   Price.
Notwithstanding  any other  provision to the contrary  herein,  if the event for
which such record was taken fails to occur or is  rescinded,  then such escrowed
shares shall be canceled by the Company and escrowed property returned.

                                       9
<PAGE>

      (h) Other Action  Affecting Common Stock. In case at any time or from time
to time the Comt 6 0 pany shall take any action in respect of its Common  Stock,
other than the  payment  of  dividends  or any other  action  described  in this
Section 6, then,  unless such action will not have a materially  adverse  effect
upon the  rights of the Holder of this  Warrant,  the number of shares of Common
Stock or other  stock for which this  Warrant  is  exercisable  into  and/or the
purchase  price  thereof shall be adjusted in such manner as may be equitable in
the circumstances.

      (i) Certain Limitations.  Notwithstanding anything herein to the contrary,
the Company  agrees not to enter into any  transaction  which,  by reason of any
adjustment hereunder, would cause the current Purchase Price to be less than the
par value per share of Common Stock.

      (j) Certificate as to Adjustments.  Upon the occurrence of each adjustment
or  readjustment  of the  Purchase  Price,  the Company,  at its expense,  shall
promptly  compute such  adjustment or  readjustment in accordance with the terms
hereof and prepare and furnish to the Holder a  certificate  setting  forth such
adjustment  or  readjustment  and  showing  in detail  the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the  Holder,  furnish or cause to be  furnished  to such holder a
like certificate setting forth (i) such adjustments and readjustments,  (ii) the
Purchase  Price at the time in effect for this  Warrant  and (iii) the number of
shares of Common Stock and the amount,  if any, or other  property  which at the
time would be received upon the exercise of this Warrant.

      (k) Notices of Record Date. In the event of any fixing by the Company of a
record  date for the  holders  of any class of  securities  for the  purpose  of
determining  the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, any shares of Common Stock or other
securities, or any right to subscribe for, purchase or otherwise acquire, or any
option  for the  purchase  of,  any  shares  of stock of any  class or any other
securities or property, or to receive any other right, the Company shall mail to
the Holder at least  thirty  (30) days prior to the date  specified  therein,  a
notice  specifying  the date on which  any such  record  is to be taken  for the
purpose of such dividend,  distribution or rights,  and the amount and character
of such dividend, distribution or right.

      (l) Merger,  Consolidation,  etc. In case of any capital reorganization or
any  reclassification  of the  capital  stock of the  Company  or in case of the
consolidation or merger of the Company with another  corporation (or in the case
of any sale,  transfer,  or other  disposition to another  corporation of all or
substantially all the property,  assets, business, and goodwill of the Company),
the Holder of this Warrant shall thereafter be entitled to purchase the kind and
amount of shares of capital  stock  which this  Warrant  entitled  the Holder to
purchase immediately prior to such capital  reorganization,  reclassification of
capital stock, consolidation,  merger, sale, transfer, or other disposition; and
in any such case appropriate adjustments shall be made in the application of the
provisions of this Section 6 with respect to rights and interests  thereafter of
the Holder of this  Warrant  to the end that the  provisions  of this  Section 6
shall thereafter be applicable, as near as reasonably may be, in relation to any
shares  or other  property  thereafter  purchasable  upon the  exercise  of this
Warrant.

      (m)  Fractional  Shares.  No certificate  for  fractional  shares shall be
issued upon the exercise of this Warrant.

                                       10
<PAGE>

      (n) Rights of the Holder. The Holder of this Warrant shall not be entitled
to any rights of a shareholder  of the Company in respect of any Warrant  Shares
purchasable  upon the exercise  hereof until such Warrant  Shares have been paid
for in full and issued to it. As soon as practicable  after such  exercise,  the
Company  shall  deliver a  certificate  or  certificates  for the number of full
shares of Common Stock  issuable  upon such  exercise,  to the person or persons
entitled to receive the same.

      (o)  Future  Priced  Securities   Limitation.   Notwithstanding   anything
contained herein to the contrary, the aggregate number of shares of Common Stock
issued upon conversion and exercise of the Future Priced  Securities (as defined
below)  cannot equal or exceed 20% of the Common Stock  outstanding  immediately
before the issuance of a Future Priced Security, unless the Company has obtained
prior shareholder approval for such issuance.  In the event the aggregate number
of shares of Common Stock that would be issued upon  conversion  and exercise of
the  Future  Priced  Securities  equals or exceeds  20% of the  Common  Stock so
outstanding, and the Company has failed to obtain prior shareholder approval for
such  issuance,  then the number of shares of Common  Stock which the holders of
the Future Priced Securities would be entitled to acquire through the conversion
and  exercise  of the Future  Priced  Securities  shall be reduced on a pro rata
basis (in  proportion  to a fraction,  the numerator of which shall be the total
number of  shares of Common  Stock  issuable  to the  holder of a Future  Priced
Security upon exercise and conversion of such holder's  Future Priced  Security,
and the  denominator of which shall be the aggregate  number of shares of Common
Stock  issuable  upon  exercise  and  conversion  of all of  the  Future  Priced
Securities) so that the aggregate number of shares of Common Stock issuable upon
exercise and conversion of the Future Priced Securities does not equal or exceed
20% of the Common Stock outstanding  immediately  before the first issuance of a
Future Priced Security. For purposes of this Warrant, "Future Priced Securities"
shall mean the Warrants and Common  Shares of the Company  issued in  connection
with the transactions contemplated by the Purchase Agreement.

7. REPRESENTATIONS AND WARRANTIES.

      The Holder, by acceptance of this Warrant, represents and warrants to, and
covenants and agrees with, the Company as follows:

      (a) The  Warrant  is being  acquired  for the  Holder's  own  account  for
investment  and not  with a view  toward  resale  or  distribution  of any  part
thereof,  and the Holder has no  present  intention  of  selling,  granting  any
participation in, or otherwise distributing the same.

      (b) The Holder is aware that the Warrant is not  registered  under the Act
or any  state  securities  or  blue  sky  laws  and,  as a  result,  substantial
restrictions  exist with respect to the  transferability  of the Warrant and the
Warrant Shares to be acquired upon exercise of the Warrant.

      (c) The Holder is an  accredited  investor  as  defined in Rule  501(a) of
Regulation D under the Act and is a  sophisticated  investor  familiar  with the
type of risks inherent in the acquisition of securities such as the Warrant, and
its financial  position is such that it can afford to retain the Warrant and the
Warrant Shares for an indefinite  period of time without realizing any direct or
indirect cash return on this investment.

                                       11
<PAGE>

8. NO IMPAIRMENT

      The  Company  shall  not  by any  action  including,  without  limitation,
amending  its  certificate  of  incorporation  or  through  any  reorganization,
transfer  of  assets,  consolidation,  merger,  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,  but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or  appropriate to protect the rights of Holder
against  impairment.  Without  limiting the  generality  of the  foregoing,  the
Company  will (a) not  increase  the par value of any  shares  of  Common  Stock
receivable  upon the exercise of this Warrant above the amount payable  therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such actions as may be necessary  or  appropriate  in order that the Company may
validly and legally  issue fully paid and  nonassessable  shares of Common Stock
upon the  exercise of this  Warrant,  and (c) use its best efforts to obtain all
such  authorizations,  exemptions  or consents from any public  regulatory  body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant. Upon the request of Holder, the Company will
at any time  during  the  period  this  Warrant is  outstanding  acknowledge  in
writing, in form satisfactory to Holder, the continuing validity of this Warrant
and the obligations of the Company hereunder.

9. SUPPLYING INFORMATION

      The Company shall  cooperate with Holder and each holder of Warrant Shares
in supplying  such  information  pertaining  to the Company as may be reasonable
necessary for such Holder and each holder of Warrant Shares to complete and file
any  information   reporting  forms  presently  or  hereafter  required  by  the
Securities  and Exchange  Commission  as a condition to the  availability  of an
exemption from the Act for the sale of Warrant Shares.

10. LIMITATION OF LIABILITY

      No provision  hereof,  in the absence of  affirmative  action by Holder to
purchase  shares of Common  Stock,  and no  enumeration  herein of the rights or
privileges of Holder hereof,  shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder  of the Company,  whether
such liability is asserted by the Company or by creditors of the Company.

11. MISCELLANEOUS.

      (a)  Transfer  Taxes;   Expenses.   The  Holder  shall  pay  any  and  all
underwriters' discounts, brokerage fees, and transfer taxes incident to the sale
or  exercise  of this  Warrant  or the sale of the  underlying  shares  issuable
thereunder,  and shall pay the fees and  expenses  of any special  attorneys  or
accountants retained by it.

      (b) Successors and Assigns.  Subject to compliance  with the provisions of
Section 3, this  Warrant  and the rights  evidenced  hereby  shall  inure to the
benefit of and be binding upon the  successors of the Company and the successors
and assigns of Holder. The provisions of this Warrant are intended to be for the
benefit  of all  Holders  from  time  to  time of this  Warrant,  and  shall  be
enforceable by any such Holder.

                                       12
<PAGE>

      (c) Notice. Any notice or other communication  required or permitted to be
given to the Company  shall be in writing and shall be  delivered  by  certified
mail with return  receipt or delivered in person against  receipt,  addressed to
the Company as follows:

           Workstream Inc.
           495 March Road, Suite 300,
           Ottawa, Ontario, Canada K2K-3G1
           Attn:  Chairman

      (d)  Governing  Law.  This Warrant  Certificate  shall be governed by, and
construed  in  accordance  with,  the laws of the  Province  of Ontario  and the
Country of Canada  applicable  therein,  without  reference to the  conflicts of
laws.

      IN WITNESS WHEREOF,  the Company has caused this Warrant Certificate to be
duly executed as of the date set forth below.

                                       WORKSTREAM INC.

                                       By:
                                          --------------------------------------
                                          Name:  Michael Mullarkey
                                          Title: Chairman and CEO

Date:  December 15, 2004

                                       13
<PAGE>

                           FORM OF EXERCISE OF WARRANT

      The  undersigned  hereby  elects to exercise  this  Warrant as to ________
Common Shares covered thereby.

      Enclosed herewith is a bank or certified check in the amount of $________.

Date:
     ------------------------                  ---------------------------------
                                               Name:
                                               Address:

                                               Signature
Guarantor:
          --------

                                       14

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